The opinion of the court was delivered by: Vanessa L. Bryant United States District Judge
MEMORANDUM OF DECISION GRANTING IN PART AND DENYING IN PART DEFENDANTS CAPITAL ONE SERVICES, LLC AND CAPITAL ONE BANK (USA), N.A.'S MOTION TO DISMISS [Doc. #20], GRANTING DEFENDANT UNITED RECOVERY SYSTEMS, LP'S MOTION TO
DISMISS [Doc. #22], AND GRANTING IN PART AND DENYING IN PART PLAINTIFF HENRY ROGERS' MOTION TO AMEND HIS COMPLAINT [Doc. #43]
The plaintiff, Henry Rogers ("Rogers"), brought this putative class action against defendants Capital One Services, LLC ("Capital One Services"), Capital One Bank (USA), N.A. ("Capital One Bank"), and United Recovery Systems, LP ("URS") alleging violations of the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.*fn1
Presently pending before the Court are motions to dismiss filed by Capital One Services and Capital One Bank (collectively the "Capital One Defendants") [Doc. #20], and by URS [Doc. #22]. Also pending is a motion to amend filed by Rogers. [Doc. #43]. Rogers seeks leave to amend his complaint to eliminate his two withdrawn claims and to assert against the Capital One Defendants violations of the Connecticut Creditors' Collection Practices Act ("CCPA"), Conn. Gen. Stat. § 36a-645 et seq., and regulations promulgated thereunder. Id. For the reasons stated below, the Capital One Defendants' motion to dismiss is GRANTED IN PART and DENIED IN PART, and URS's motion to dismiss is GRANTED. Rogers' motion to amend is GRANTED IN PART and DENIED IN PART.
I. FACTUAL AND PROCEDURAL BACKGROUND Rogers' amended complaint alleges the following facts, which are taken as true for purposes of the instant motions. Rogers, a resident of Mystic, Connecticut, holds a consumer credit account with Capital One Bank, which has its principle of business in McLean, Virginia. Capital one Bank is a National Banking Association and wholly owned subsidiary of Capital One Financial Corporation ("COFC"). In or around February 2010, Rogers received a letter signed by Capital One Services (hereinafter the "Letter"), a Delaware limited liability company and subsidiary of Capital One Bank, which is engaged in the business of collecting debts on behalf of Capital One Bank and other COFC subsidiaries. The Letter, which is incorporated into the amended complaint, identifies Capital One Bank as the "creditor" on Rogers' account and advises Rogers that the annual percentage rate on his credit card account will be reduced to 0% if he calls a toll-free number to makes arrangements for an acceptable repayment plan. The Letter further states that, if he fails to make payments as agreed under the repayment plan, then his annual percentage rate will return to 19.90%.
The Letter does not specifically indicate that Rogers' account is delinquent, but contains language suggesting as much. For instance, the first paragraph of the Letter states "We realize circumstances can sometimes make it difficult to manage your finances. The good news is -- there's a way to pay it off." Am. Compl. ¶ 10. Similarly, there is a post-script inviting Rogers to "Call today at 1-800-258-9319 to make payment arrangements and start to resolve your debt." Id. The final paragraph of the Letter notifies Rogers that if his account is being served by "one of our external agencies, they will be able to assist you and will notify us when you have made acceptable arrangements with them." Am. Compl.
¶ 10. Telephone calls to the toll-free number listed in the Letter are redirected to URS, a Texas corporation engaged in the business of collecting, or attempting to collect, debts owed or due or asserted to be owed or due to another. While the Letter informed Rogers that his account might be handled by an external agency, it did not specifically identify URS.
The bottom of the first page of the Letter contains the following text: "NOTICE: PLEASE SEE REVERSE SIDE FOR IMPORTANT INFORMATION." Id. The reverse side of the Letter makes a series of disclosures. Capital One Services makes clear that it is the entity sending the Letter, that it is a subsidiary of Capital One Bank, and that it provides services to Capital One affiliates:
Who We Are and Who We Service. Capital One Services, LLC is a subsidiary of Capital One, National Association, and services the following Capital One affiliated companies:
Capital One Bank (USA), National Association; Capital One, National
Association; and Capital One Auto Finance, Inc.
Id. ¶ 11. The reverse side of the Letter also includes a series of
disclosures required by state and local law of various jurisdictions.
One of these disclosures, which applies to individuals receiving the
Letter in Connecticut as well as multiple other States, provides as
follows: "This is an attempt to collect a (consumer) debt (claim). Any
information obtained will be used for that purpose." Id. Another
disclosure, which applies only to individuals receiving the Letter in
Iowa, states: "This communication is from a debt collector." Id.
Rogers claims that the Letter deceives and misleads consumers in the following ways. First, he claims it omits "any mention of the consumer's right, under Federal law, to dispute the debt or to obtain verification of the debt. Id. ¶15. Second, he claims it deceives and misleads by "creating the false impression that it is transmitted by Capital One [Bank]," when in fact it is transmitted by Capital One Services, "on its own behalf and on behalf of" URS. Id. ¶ 16. Third, he claims the Letter fails to "effectively communicate that it is transmitted by a 'debt collector.'" Id. ¶ 17. Finally, he claims the Letter entices the addressee to contact Capital One Services and URS by offering an annual percentage rate of 0% on his debt if he makes an acceptable repayment plan and threatening that his annual percentage rate will "return to 19.90%" on the entire debt if that agreement is not honored. Id. ¶ 18.
The Letter was the first written communication transmitted to and received by Rogers in which any debt was noted with reference to his credit account with Capital One Bank. He does not indicate whether he had previously received a bill from Capital One Bank. Nor does not allege what, if any, action he took in response to the Letter.
The amended complaint also contains class action allegations asserting that the Letter received by Rogers is a mass-mailed form letter substantially similar to thousands of letters sent to consumers across the country. Accordingly, Rogers seeks certification of a class pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of himself and all others similarly situated. The proposed class is defined as: "All consumers to whom a letter in the form of the Letter was sent by the Defendants into the State of Connecticut within one year prior to the filing date of this action and which was not returned as undeliverable." Id. ¶ 20.
Rogers filed this action on March 16, 2010. [Doc. #1]. He filed his amended complaint on May 6, 2010. [Doc. #18]. The defendants filed their motions to dismiss on May 20, 2010. [Doc. ##20, 22]. They move to dismiss the amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, to strike the class action allegations in the amended complaint. Rogers filed a joint opposition to both motions on June 10, 2010. [Doc. #31]. The defendants filed a joint reply on June 17, 2010. [Doc. #33]. Subsequently, on July 19, 2010, Rogers filed his motion to amend his complaint in order to omit his two withdrawn claims and to add four additional claims against the Capital One Defendants for violation of the CCPA and regulations promulgated thereunder. [Doc. #43]. The Capital One Defendants filed an opposition to the motion to amend on August 9, 2010, arguing that the proposed CCPA claims are futile. [Doc. #47].
II. STANDARD OF REVIEW "Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a 'short and plain statement of the claim showing that the pleader is entitled to relief.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While Rule 8 does not require detailed factual allegations, "[a] pleading that offers 'labels and conclusions' or 'formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (internal quotations omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (internal citations omitted).
In considering a motion to dismiss for failure to state a claim, the Court should follow a "two-pronged approach" to evaluate the sufficiency of the complaint. Hayden v Paterson, 594 F.3d 150, 161 (2d Cir. 2010). "A court 'can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'" Id. (quoting Iqbal, 129 S.Ct. at 1949-50). "At the second step, a court should determine whether the 'well-pleaded factual allegations,' assumed to be true, 'plausibly give rise to an entitlement to relief.'" Id. (quoting Iqbal, 129 S.Ct. at 1950). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 S.Ct. at 1949 (internal quotation marks omitted).
III. DISCUSSION A. FDCPA Claims Against Capital One Defendants The Capital One Defendants argue that Rogers' FDCPA claims against them should be dismissed because neither company is a "debt collector" under the FDCPA. Rogers alleges violations of 15 U.S.C. §§ 1692e, 1692f, and 1692g. Each of these provisions proscribes the conduct of debt collectors solely. See id.; Williams v. Citibank, N.A., 565 F. Supp. 2d 523, 528 (S.D.N.Y. 2008). Therefore, the Court must determine whether Rogers has sufficiently alleged that both of the Capital One Defendants are debt collectors under the FDCPA.
The FDCPA defines a "debt collector" as:
[A]ny person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.
15 U.S.C. § 1692a(6). Generally, creditors are not subject to the FDCPA. See Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 235 (2d Cir. 1998). However, under the "false name" exception, a creditor becomes subject to the FDCPA as a debt collector if the creditor "in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts." 15 U.S.C. § 1692a(6).
1. Claims as against Capital One Bank
Rogers refers to Capital One Bank as a creditor in his amended complaint. Further, the Letter explicitly identifies Capital One Bank as Rogers' creditor. In his opposition to the motion to dismiss, Rogers does not dispute that Capital One Bank is a creditor under the FDCPA.*fn2 Nevertheless, Rogers contends that Capital One Bank may be held liable under the FDCPA based upon the "false name" exception set forth in 15 U.S.C. § 1692a(6). This exception applies to any creditor who, in the process of collecting or attempting to collect its debts, "indicate[s] that a third party is collecting or attempting to collect such debts, . . . pretends to be someone else or uses a pseudonym or alias, . . . or [who] owns and controls the debt collector, rendering it the creditor's alter ego." See Mazzei v. Money Store, 349 F. Supp. 2d 651, 659 (S.D.N.Y.2004) (internal quotations and citations omitted).
Conspicuously absent from Rogers' amended complaint is any allegation that Capital One Bank, his creditor, is collecting or attempting to collect its own debt, as he would need to demonstrate in order for the false name exception to apply. Rather, the amended complaint states that the debt was "transferred" to debt collectors, namely Capital One Services and URS, "for handling." Am. Compl. ¶ 40. Further, the Letter is signed by Capital One Services, and the amended complaint acknowledges that the Letter was transmitted by Capital One Services, "on its own behalf and on behalf of [URS]." Id. ¶ 16. Capital One Bank cannot be held liable under the false name exception merely because it employed a debt collector to recover its debt. See ...