December 1, 2017
from the United States District Court for the Eastern
District of Wisconsin. No. l:17-cv-132 - William C.
Bauer, Flaum, and Rovner, Circuit Judges.
sued defendant, a debt collection agency, for violations of
the Fair Debt Collection Practices Act ("FDCPA").
Specifically, plaintiffs allege that defendant's dunning
letters were false and misleading because they threatened to
impose "late charges and other charges" that could
not lawfully be imposed. The district court dismissed
plaintiffs' claims because the challenged statement
mirrors the safe harbor language that this Court instructed
debt collectors to use in Miller v. McCalla, Raymer,
Padrick, Cobb, Nichols, & Clark, LLC, 214 F.3d 872
(7th Cir. 2000). The district court further held that
defendant's failure to remove the reference to "late
charges and other charges" was not materially
misleading. For the reasons below, we reverse.
are Wisconsin residents who incurred and defaulted on debts
for medical services. Plaintiffs' creditors assigned
these debts to defendant, Finance System of Green Bay, Inc.
("FSGB"), a collection agency. In turn, FSGB sent
plaintiffs a letter informing them of their principal
balance, their interest balance, and their total account
balance. The letter also included the following statement:
As of the date of this letter, you owe $[a stated amount].
Because of interest, late charges, and other charges that may
vary from day to day, the amount due on the day you pay may
be greater. Hence, if you pay the amount shown above, an
adjustment may be necessary after we receive your check. For
further information, write to the above address or call
January 30, 2017, plaintiffs filed a class action complaint
against FSGB in the Eastern District of Wisconsin for
violations of the FDCPA, 15 U.S.C. §§ 1692-1692p.
Plaintiffs allege that FSGB's letter is false because
under Wisconsin law, FSGB cannot lawfully or contractually
impose "late charges and other charges." Plaintiffs
further allege that the letter causes unsophisticated
consumers to incorrectly believe that they will avoid such
charges, and thus benefit financially, if they immediately
send payment. For these reasons, plaintiffs claim that the
letter is false, misleading, and deceptive in violation of
§ 1692e. Plaintiffs also claim that the letter fails to
properly state the amount of debt, as required by §
motion to dismiss, FSGB argued that it complied with the
FDCPA as a matter of law because the allegedly false
statement tracks the safe harbor language provided by this
Court in Miller. FSGB further asserted that,
although it may not lawfully impose "late charges and
other charges, " the reference to such charges was not
materially misleading because it is entitled to charge
district court granted defendants' motion to dismiss. In
doing so, it acknowledged that some of the Miller
safe harbor language-namely, the phrase "late charges
and other charges"-does not "strictly" apply
in this case. Boucher v. Fin. Sys. of Green Bay,
Inc., No. 17-cv-132, 2017 WL 2345678, at *4 (E.D. Wis.
May 30, 2017). However, it reasoned that "the central
purpose of Miller's safe harbor formula is to
provide debt collectors with a way to notify debtors that the
amounts they owe may ultimately vary." Id.
Accordingly, it concluded that debt collectors like FSGB may
rely on the Miller safe harbor language as long as
the debt is variable in some way-regardless of "whether
the increase occurred because of interest, late charges,
other charges, some combination thereof, or all of the
above." Id. Because FSGB's letter conveyed
"the crucial fact" that plaintiffs' debts were
variable, the court concluded that FSGB was entitled to safe
harbor protection under Miller. This appeal
review de novo a district court's decision to grant a
motion to dismiss under Rule 12(b)(6). Bible v. United
Student Aid Funds, Inc., 799 F.3d 633, 639 (7th Cir.
2015). In doing so, we accept as true all factual allegations
in the complaint and draw all permissible inferences in
plaintiffs' favor. Id. To survive a motion to
dismiss, a plaintiff must allege "enough facts to state
a claim to relief that is plausible on its face."
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). "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." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). "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." Id. (quoting Twombly, 550
U.S. at 556).
FSGB's Dunning Letter is Materially False, Misleading,