Andrew Magdy v. I.C. System, Inc. ( 2022 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 21-3010
___________________________
Andrew Magdy
Plaintiff - Appellant
v.
I.C. System, Inc.
Defendant - Appellee
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: April 14, 2022
Filed: September 6, 2022
____________
Before SHEPHERD, ERICKSON, and STRAS, Circuit Judges.
____________
SHEPHERD, Circuit Judge.
Appellant Andrew Magdy sued I.C. System, Inc. (ICS) under the Fair Debt
Collection Practices Act (FDCPA) for violating 15 U.S.C. § 1692c(b), which
prohibits a debt collector from contacting a third party about the collection of a debt
without the prior consent of the consumer. The district court 1 granted ICS’s motion
for judgment on the pleadings, finding that Magdy, a non-consumer, lacked standing
to bring a cause of action under § 1692c(b). Having jurisdiction under 28 U.S.C.
§ 1291, we join other circuits that have reviewed this issue and affirm.
I.
On July 27, 2020, ICS sent Magdy, a bankruptcy attorney, a debt collection
letter identifying him as the attorney for a consumer named in the letter.2 In fact,
the consumer was not Magdy’s client, the consumer had never identified Magdy as
her attorney to anyone, and Magdy had never identified himself as the consumer’s
attorney. There is no indication that the consumer consented to ICS contacting
attorneys not retained by her about her debt. Unable to recognize the consumer’s
name, Magdy engaged in an extensive search of his files and records to determine if
he had ever represented the consumer. He found nothing to indicate that she was a
past or present client. This search cost Magdy valuable time and resources that he
could have spent working on matters for actual clients.
Magdy filed suit in Missouri state court, and ICS properly removed the action
to the district court. Magdy asserted that ICS violated § 1692c(b) when it contacted
him regarding the debt of a consumer whom he did not represent, without the
consumer’s consent, and that he suffered injury as a result. ICS timely moved for
judgment on the pleadings, arguing that third-party attorneys lack standing to sue
under § 1692c. The district court determined that ICS’s letter to Magdy violated
§ 1692c(b) but nevertheless agreed that Magdy lacked standing to sue under § 1692c
and, thus, entered judgment on the pleadings against Magdy. Though Magdy
“ask[ed] for leave to replead his claims pursuant to Section 1692d” in his response
1
The Honorable Henry E. Autrey, United States District Judge for the Eastern
District of Missouri.
2
Magdy alleges that this letter is one of approximately 160 such letters sent to
him by ICS, but he claims a violation of the FDCPA for only this letter.
-2-
to ICS’s motion, he never filed a motion for leave to amend his pleadings or for
remand.
II.
Magdy argues that the district court erred in finding that he lacks standing to
sue under § 1692c(b).3 In a matter of first impression for this Court, Magdy’s appeal
presents a straightforward question of statutory interpretation: whether Magdy, a
third-party attorney unaffiliated with the relevant consumer, falls within the class of
plaintiffs that Congress has authorized to sue under § 1692c(b). Magdy asks us to
read § 1692c(b) as giving him, a third party contacted about a consumer’s debt
without the consumer’s consent, a cause of action. We review de novo the district
court’s grant of ICS’s motion for judgment on the pleadings. Gallagher v. City of
Clayton, 699 F.3d 1013, 1017 (8th Cir. 2012). “A grant of judgment on the pleadings
is appropriate ‘where no material issue of fact remains to be resolved and the movant
is entitled to judgment as a matter of law.’” Poehl v. Countrywide Home Loans,
Inc., 528 F.3d 1093, 1096 (8th Cir. 2008) (citation omitted).
Section 1692c(b) concerns third-party communications by debt collectors:
Except as provided in section 1692b[4] of this title, without the prior
consent of the consumer given directly to the debt collector, or the
express permission of a court of competent jurisdiction, or as
3
It is undisputed that Magdy has Article III standing. See Miller v. Redwood
Toxicology Lab’y, Inc., 688 F.3d 928, 933-34 (8th Cir. 2012) (“‘Article III, § 2, of
the Constitution extends the “judicial Power” of the United States only to “Cases”
and “Controversies.”’ . . . Article III standing must be decided first by the court and
presents a question of justiciability; if it is lacking, a federal court has no
subject-matter jurisdiction over the claim.”).
4
A debt collector may communicate with “any person other than the consumer
for the purpose of acquiring location information about the consumer.” 15 U.S.C.
§ 1692b. ICS is not protected by this safe-harbor provision because its letter did not
seek the consumer’s location information.
-3-
reasonably necessary to effectuate a postjudgment judicial remedy, a
debt collector may not communicate, in connection with the collection
of any debt, with any person other than the consumer, his attorney, a
consumer reporting agency if otherwise permitted by law, the creditor,
the attorney of the creditor, or the attorney of the debt collector.
We see no reason to disturb the district court’s determination that ICS violated
§ 1692c(b). Without the consumer’s prior consent, ICS contacted Magdy, who was
unaffiliated with the consumer, about the collection of the consumer’s debt. ICS’s
violation of § 1692c(b), however, does not guarantee Magdy statutory standing.
Whether Magdy may bring a cause of action under § 1692c(b) requires a separate
inquiry. Magdy interprets § 1692c(b) as giving a cause of action to anyone who is
contacted by a debt collector in violation of the statute.
Magdy relies on the language in 15 U.S.C. § 1692k, the FDCPA’s general
civil liability provision, to support his interpretation. Section 1692k(a) provides:
“Except as otherwise provided by this section, any debt collector who fails to comply
with any provision of this subchapter with respect to any person is liable to such
person . . . .” Focusing on the language, “with respect to any person is liable to such
person,” Magdy argues that because ICS failed to comply with § 1692c(b) “with
respect to” him by sending him the letter, ICS is liable to him. Section 1692k(a)’s
language clearly demonstrates that FDCPA protection extends beyond consumers.
See, e.g., Todd v. Collecto, Inc., 731 F.3d 734, 737 (7th Cir. 2013). However,
§ 1692k’s broad language alone does not end the inquiry. We must read § 1692k in
the context of the entire statute, not in isolation. Cf. Does v. Gillespie, 867 F.3d
1034, 1043 (8th Cir. 2017) (“Congressional intent or meaning is not discerned by
considering merely a portion of a statutory provision in isolation, but rather by
reading the complete provision in the context of the statute as a whole.”). Moreover,
the plain language of § 1692k indicates that the substantive provisions of the statute
must play some role in our statutory standing analysis. § 1692k does not simply
allow “any person” to sue for a violation. Rather, it provides a cause of action
against a debt collector who “fails to comply with any provision of this subchapter
with respect to any person.” This calls on us to analyze “each provision of the
-4-
FDCPA . . . individually to determine who falls within the scope of its protection.”
Todd, 731 F.3d at 738; cf. Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 649
(6th Cir. 1994) (en banc) (noting that § 1692k is subject to “limitation[s] in the
substantive provisions” of the FDCPA). Thus, to determine whether Magdy has a
statutory cause of action, we must turn our attention to § 1692c, the substantive
“provision” that I.C. Systems has “fail[ed] to comply with.”
“[W]e presume that a statutory cause of action extends only to plaintiffs whose
interests ‘fall within the zone of interests protected by the law invoked.’” Lexmark
Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 129 (2014) (quoting
Allen v. Wright, 468 U.S. 737, 751 (1984)). The zone-of-interests test requires us
to use “traditional tools of statutory interpretation” to determine “whether a
legislatively conferred cause of action encompasses a particular plaintiff's claim.”
Lexmark, 572 U.S. at 127. In “[i]dentifying the interests protected” by a statute, we
analyze the statute’s text to derive its “purposes.” See id. at 131 (identifying the
interests protected by the Lanham Act by reviewing the statute’s statement of
purposes); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of
Legal Texts 56 (2012) (“[T]he purpose must be derived from the text.”). Here,
Section 1692c(b)’s plain language—“without the prior consent of the consumer”—
indicates that Magdy is outside the scope of its protection. Any violation of § 1692c
depends on the debt collector making contact without the consumer’s prior consent.
As long as the debt collector has the consumer’s prior consent, it may send a
relentless stream of letters to a third party without running afoul of § 1692c(b). We
thus read the plain language of § 1692c(b) as making clear that the provision’s
purpose is to protect consumers, not third parties. Cf. Kuntz v. Rodenburg LLP, 838
F.3d 923, 925 n.2 (8th Cir. 2016) (reviewing § 1692b(3)’s plain language to
determine its purpose). Because the purpose of § 1692c(b) is to protect consumers
alone, we conclude that Magdy falls outside § 1692c(b)’s “zone of interests” and
thus cannot invoke the protection afforded by it.
Magdy emphasizes that § 1692c(b) limits communications with third parties,
not consumers. He contrasts § 1692c(b) with its neighboring provision, § 1692c(a),
-5-
which restricts debt collectors’ communications with consumers. Section 1692c(a)
begins: “Without the prior consent of the consumer given directly to the debt
collector or the express permission of a court of competent jurisdiction, a debt
collector may not communicate with a consumer in connection with the collection
of any debt . . . .” Magdy argues, “ICS conflates a third party’s lack of standing
under Section 1692c(a), which literally applies only to ‘communications with
consumers,’ with a third party’s standing under Section 1692c(b), which literally
applies to ‘communications with third parties.’” Appellant Reply Br. 14. The
difference between communication recipients in subsections (a) and (b), however, is
not determinative of the question of standing. Basing third-party standing on
communication recipients would logically mean that consumers lack standing to sue
debt collectors for § 1692c(b) violations because the communication was not
directed toward them. Such a rigid limitation “would be inconsistent with
§ 1692c(b), a provision that places control over the disclosure of a consumer’s
information squarely in the hands of the consumer, not the third party who may
receive the disclosure.” Todd, 731 F.3d at 738.
We agree with Magdy that the FDCPA protects more than just consumers in
its regulation of debt collectors. Congress intended for the FDCPA to “make
collectors behave responsibly towards people with whom they deal.” H.R. Rep.
No. 95-131, at 8 (1977). However, as the Sixth Circuit recognized in Montgomery
v. Huntington Bank, the availability of relief to non-consumers under other sections
of the FDCPA does not guarantee non-consumers relief under § 1692c. 346 F.3d
693, 696-97 (6th Cir. 2003). The FDCPA provisions, such as 15 U.S.C. §§ 1692b(3)
and 1692d, that offer third parties protection, do so without requiring the consumer’s
consent, unlike § 1692c. Section 1692b(3) limits a debt collector seeking to acquire
a consumer’s location information from “communicating with any person other than
the consumer . . . more than once unless requested to do so by such person.” This
Court has previously determined that third parties may sue under § 1692b(3) because
the provision’s “plain language . . . makes clear that its purpose was to protect ‘any
person other than the consumer’ from unwanted, repetitive calls from debt
collectors.” Kuntz, 838 F.3d at 925 n.2. Section 1692d broadly provides: “A debt
-6-
collector may not engage in any conduct the natural consequence of which is to
harass, oppress, or abuse any person in connection with the collection of a debt.”
“[C]ourts have stressed that § 1692d is not a protection just for consumers but for
any person mistreated by a debt collector.” Todd, 731 F.3d at 737. “Section 1692c,
however, appears to be the most restrictive of the FDCPA’s provisions. The other
provisions are not limited to ‘consumers,’ and thus are broader than § 1692c.”
Wright, 22 F.3d at 649 n.1.
Magdy relies on Thomas v. Consumer Adjustment Co., Inc., in which the
Eastern District of Missouri found that a third party alleging direct harm and actual
damages from a communication proscribed by § 1692c(b) had standing to sue under
§ 1692k. 579 F. Supp. 2d 1290, 1298-99 (E.D. Mo. 2008). In Thomas, a debt
collector called a consumer’s apartment and spoke with the consumer’s girlfriend,
who also lived at the apartment. Id. at 1292-93. The debt collector indicated that
the consumer’s brother was in trouble, causing the consumer to suffer severe
emotional distress when his girlfriend relayed the false message. Id. at 1293. Both
the consumer and his girlfriend sued the collector as co-plaintiffs. Id. at 1292. The
Thomas court found third-party standing “under the unique facts posed here, where
the third-party alleges a direct harm and actual damages.” Id. at 1299. Here, the
district court acknowledged Thomas but found it inapplicable “since it was decided
on a unique set of facts.” We agree with the district court that Thomas should not
guide our statutory interpretation. The Thomas court did not intend to advance
Magdy’s expansive interpretation of § 1692c(b), which would provide standing to
third parties with no relationship to the consumer and without the consumer as a
co-plaintiff. Further, we are not bound by its decision.
We join the other circuits that have considered this issue in concluding that
non-consumers cannot bring a claim under § 1692c(b). See, e.g., Todd, 731 F.3d at
737 (“[Section] 1692c restricts debt collectors’ communications with and about
consumers and is understood to protect only the consumer-debtors themselves.”);
Montgomery, 346 F.3d at 696 (“[O]nly a ‘consumer’ has standing to sue for
violations under 15 U.S.C. § 1692c.” (citation omitted)); Johnson v. Ocwen Loan
-7-
Servicing, 374 F. App’x 868, 874 (11th Cir. 2010) (per curiam) (holding that
plaintiff lacked standing to sue under § 1692c because she was not a consumer).
Magdy draws factual distinctions between these cases and the present case, and he
notes that the cases cited do not specifically involve claims of § 1692c(b) violations
but, rather, comment generally on § 1692c. Nevertheless, we find our sister circuits’
views on § 1692c persuasive as we consider this matter for the first time.
III.
Magdy next argues that the district court abused its discretion by refusing to
grant him leave to amend his petition and failing to explain why. Magdy cites
Federal Rule of Civil Procedure 15(a)(2), which provides a party the opportunity to
amend its pleadings with the court’s leave and notes that “[t]he court should freely
give leave when justice so requires.” In Magdy’s response to ICS’s motion for
judgment on the pleadings, under the heading “Conclusion and Request for
Additional Relief Under FRCP 15(a)(2),” he “ask[ed] for leave to replead his claims
pursuant to Section 1692d.” R. Doc. 23, at 11. Magdy never filed a motion to amend
or a memorandum in support of such a motion. We review the denial of leave to
amend a complaint for abuse of discretion. Ash v. Anderson Merchandisers, LLC,
799 F.3d 957, 962 (8th Cir. 2015). Upon careful review of the record, we conclude
that there was no abuse of discretion because Magdy failed to follow the applicable
rules, including Eastern District of Missouri Local Rule 4.01(A). See E.D. Mo. R.
4.01(A) (“Unless otherwise directed by the [district court], the moving party must
file with each motion a memorandum in support of the motion, including any
relevant argument and citations to any authorities on which the party relies.”); see
also Jetton v. McDonnell Douglas Corp., 121 F.3d 423, 426 (8th Cir. 1997) (“[L]ocal
rules in aid of federal procedural rules and laws of Congress are specifically
authorized by Federal Rule of Civil Procedure 83(a)(1). One of the most common
types of local rules—such as Rule 4.01 here—are rules on when and how motions
are to be presented and heard, and such rules have routinely been upheld. A local
rule of a district court has the force of law, and the parties are charged with
-8-
knowledge of the district court’s rules the same as with knowledge of the Federal
Rules and all federal law.” (citations and footnote omitted)).
IV.
Finally, Magdy asserts that, even if the district court correctly concluded that
he lacks standing to sue under § 1692c(b), the proper action was to remand to the
state court. Magdy cites case law in which we have instructed district courts to
remand cases originally filed in state court when the plaintiff lacks Article III
standing. See Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1033 (8th Cir. 2014).
However, Magdy confuses Article III standing, which implicates subject matter
jurisdiction and is undisputed here, and statutory standing.
When a plaintiff alleges injury to rights conferred by statute, two
separate standing-related inquiries are implicated: whether the plaintiff
has Article III standing (constitutional standing) and whether the statute
gives that plaintiff authority to sue (statutory standing). . . . “Statutory
standing is simply statutory interpretation: the question it asks is
whether Congress . . . has accorded this injured plaintiff the right to sue
the defendant to redress his injury.”
Miller v. Redwood Toxicology Lab’y, Inc., 688 F.3d 928, 934 (8th Cir. 2012)
(citation omitted). This appeal concerns statutory standing under § 1692c(b). The
district court’s decision that Magdy lacks statutory standing was a ruling on the
merits of his claim, not on the district court’s jurisdiction. Because Magdy only
alleged a violation of § 1692c(b) and the district court correctly determined that §
1692c(b) does not provide Magdy standing to sue, judgment as a matter of law was
appropriate.
V.
For the foregoing reasons, we affirm the judgment of the district court.
-9-
STRAS, Circuit Judge, dissenting.
The zone-of-interests test requires us to apply “traditional principles of
statutory interpretation.” Lexmark Int’l, Inc. v. Static Control Components, Inc., 572
U.S. 118, 127 (2014). Figuring out whether Andrew Magdy falls within the zone of
interests of the Fair Debt Collection Practices Act’s third-party-communications and
civil-liability statutes should be easy: rely on the words, not their purpose. Ante, at
5–7. Under “traditional principles of statutory interpretation,” purpose cannot
override unambiguous text. See BedRoc Ltd., LLC v. United States, 541 U.S. 176,
183 (2004). And because the text unambiguously gives third parties like Magdy “a
cause of action,” I respectfully dissent.
I.
Sometimes a title really does say it all. See I.N.S. v. Nat’l Ctr. For
Immigrants’ Rights, Inc., 502 U.S. 183, 189 (1991). Magdy relied on a statute
entitled “[c]ommunication [w]ith [t]hird [p]arties” to argue that he should be able to
sue because, as a third party, he received an unsolicited and unauthorized
communication from a “debt collector.” Fair Debt Collection Practices Act, Pub. L.
No. 95-109, § 805(b), 91 Stat. 874, 877 (1977) (using the title, “Communication
With Third Parties”). As relevant here, the statute in question prohibits debt
collectors, “without the prior consent of the consumer,” from “communicat[ing], in
connection with the collection of any debt, with any person other than the consumer,
his attorney, a consumer reporting agency . . . , the creditor, the attorney of the
creditor, or the attorney of the debt collector.” 15 U.S.C. § 1692c(b). The court and
I both agree that Magdy is none of those things, even if I.C. Systems may have
thought he was the consumer’s attorney at the time.
Having determined that the third-party-communications statute covers this
situation, the next step is to determine whether Magdy can sue for the violation. The
answer to that question lies in the Fair Debt Collection Practices Act’s
“[c]ivil[-]liability” statute. 15 U.S.C. § 1692k. It says that “any debt collector who
-10-
fails to comply with any provision of this subchapter with respect to any person is
liable to such person in an amount equal to the sum of . . . any actual damage
sustained by such person.” Id. § 1692k(a)(1) (emphasis added). The court and I
agree that I.C. Systems is a “debt collector”; that it “fail[ed] to comply” with the
third-party-communications statute, which is “a[] provision of th[e] subchapter”; and
that Magdy is a “person.” Id. The only real question is whether I.C. “fail[ed] to
comply . . . with respect to” Magdy. Id.
The connective phrase, “with respect to,” could hardly be “broader.”
Cipollone v. Liggett Group, Inc., 505 U.S. 504, 522–23 (1992) (analyzing the
phrase’s meaning in a preemption statute). It means “[i]n reference or relation to;
concerning.” The American Heritage Dictionary of the English Language 1495 (5th
ed. 2016); see also Presley v. Etowah County Comm’n, 502 U.S. 491, 505–06 (1992)
(using “direct relation to,” “impact on,” and “with respect to” interchangeably).
Although relatively uncommon in everyday speech, “with respect to” denotes a
connection between two things—in this situation, a Fair Debt Collection Practices
Act violation and the person who wants to sue. Huffington v. T.C. Group, LLC, 637
F.3d 18, 22 (1st Cir. 2011); see also Coregis Ins. Co. v. Am. Health Found., Inc.,
241 F.3d 123, 128–29 (2d Cir. 2001) (“Courts have similarly described the term
‘relating to’ as equivalent to the phrases ‘in connection with’ and ‘associated with,’
and synonymous with the phrases ‘with respect to,’ and ‘with reference to.’”)
(citations omitted).
For two reasons, I would conclude that the violation in this case had the
necessary “relation to” Magdy. Presley, 502 U.S. at 506. The first is that he is the
one who received the letter and spent “valuable time and resources” dealing with it.
Ante, at 2. The second is that the broad connective phrase ends with an even broader
statement of who can sue: “any person.” 15 U.S.C. § 1692k(a) (emphasis added).
As the Supreme Court has explained, the word “‘any’ . . . can broaden to the
maximum” and has an “expansive meaning” in a statute. See Freeman v. Quicken
Loans, Inc., 566 U.S. 624, 635 (2012); United States v. Taylor, No. 20-2756, slip op.
at 12 (8th Cir. August 10, 2022) (discussing the use of the word “any” in a criminal
-11-
statute). So when the statute says that the debt collector “is liable to such person,”
which is a reference back to “any person,” it is authorizing people like Magdy to
sue. 15 U.S.C. § 1692k(a) (emphasis added).
II.
The court reaches a contrary conclusion, but only by extracting what it
believes is the consumer-consent requirement’s true purpose. See Ante, at 5–7; 15
U.S.C. § 1692c(b). Despite recognizing that the Fair Debt Collection Practices Act
protects more than just consumers, the court implies such a limitation anyway by
holding that only consumers can sue for violations of the third-party-
communications statute. In doing so, the court forgets the assignment, which is to
read the statute and give it a natural, everyday meaning, not “psychoanalyz[e] those
who enacted it.” Carter v. United States, 530 U.S. 255, 257 (2000); see Lexmark,
572 U.S. at 128 (explaining that a court “cannot limit a cause of action that Congress
has created merely because ‘prudence’ dictates”). After all, “[w]e do not ask
whether in our judgment Congress should have authorized [the] suit, but whether
Congress in fact did so.” Lexmark, 572 U.S. at 128 (emphasis in original).
This case shows why. For one thing, the consumer-consent requirement
protects more than just consumer privacy. It also shields third parties from harassing
and unwanted communications while still allowing consumers to authorize third-
party disclosure when needed. An obvious example would be a background check
during the hiring process. The point is that, when statutes have multiple purposes,
trying to narrow it down to just one becomes an exercise in “looking over a crowd
and picking out your friends.” Exxon Mobil Corp. v. Allapattah Servs., 545 U.S.
546, 568 (2005) (recounting Judge Levanthal’s colorable phrase in describing the
use of legislative history (citation omitted)).
Even more dubious is the conclusion that allowing a third party to sue is
somehow incompatible with “protect[ing] consumers.” Ante, at 6. Consumer
privacy and third-party suits go hand in hand. In the typical situation, consumers
-12-
may never know that a debt collector has contacted someone else about their debt.
Allowing a third party to sue in those circumstances creates a more robust deterrent
effect against the unauthorized sharing of private credit information.
III.
In any event, the Fair Debt Collection Practices Act is clear: Magdy has a
cause of action for the “actual damage[s]” he suffered. 15 U.S.C. §§ 1692c(b),
1692k(a)(1). Congress can amend the statute if it disagrees. I respectfully dissent.
______________________________
-13-