Camacho v. Bridgeport Financial ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RITA CAMACHO, on behalf of 
herself and all others similarly
situated,
Plaintiff-Appellee, No. 04-17126
v.
BRIDGEPORT FINANCIAL INC.,  D.C. No.
CV 04-0478 CRB
Defendant-Appellant, OPINION
and
RAY LEWIS, CHRISTINA HARBRIDGE,
Defendants.

Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted
November 14, 2005—San Francisco, California
Filed December 12, 2005
Before: Jerome Farris, A. Wallace Tashima, and
Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Tashima
16231
CAMACHO v. BRIDGEPORT FINANCIAL INC. 16233
COUNSEL
Mark E. Ellis, Murphy, Pearson, Bradley & Feeney, Sacra-
mento, California, for the defendant-appellant.
Richard J. Rubin, Santa Fe, New Mexico, for the plaintiff-
appellee.
16234 CAMACHO v. BRIDGEPORT FINANCIAL INC.
OPINION
TASHIMA, Circuit Judge:
Rita Camacho (“Camacho”), a debtor, sued Bridgeport
Financial, Inc. (“Bridgeport Financial”), a debt collector, for
violations of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692g and 1692e. Camacho alleges
that Bridgeport Financial’s initial collection notice, which
stated that Camacho could only dispute the validity of the
debt in writing, misrepresented Camacho’s rights. The district
court denied Bridgeport Financial’s motion to dismiss, con-
cluding that Camacho had stated a viable claim under the
plain meaning of the statute. The district court certified the
issue for interlocutory appeal and we granted the petition
under 28 U.S.C. § 1292(b). We affirm.
BACKGROUND
Camacho’s debt of $42.57 was assigned to Bridgeport
Financial by Into Video.1 In its initial collection communica-
tion, Bridgeport Financial included the statement: “Unless
you notify this office in writing within 30 days after receiving
this notice that you dispute the validity of this debt or any por-
tion thereof, this office will assume this debt is valid.”
(Emphasis added.) Camacho sued under §§ 1692g and 1692e
of the FDCPA, alleging that this statement misrepresented the
rights of consumers because it required Camacho to dispute
the debt in writing. Bridgeport Financial filed a motion to dis-
miss the action under Federal Rule of Civil Procedure
12(b)(6), arguing that § 1692g(a)(3) implicitly requires dis-
putes to be in writing because only written disputes can
invoke the other protections afforded by the FDCPA. The dis-
trict court rejected Bridgeport Financial’s arguments, holding
that the plain meaning of § 1692g(a)(3) did not require that
1
This case was brought as a putative class action, but the district court
has not yet ruled on the class aspects of the case.
CAMACHO v. BRIDGEPORT FINANCIAL INC. 16235
disputes be in writing and that this interpretation did not
undermine the purpose or destroy the coherence of the statute.
STANDARD OF REVIEW
We review a district court’s decision to grant or deny a
motion to dismiss pursuant to Rule 12(b)(6) de novo. Fire-
man’s Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 939 (9th
Cir. 2002). We also review questions of statutory interpreta-
tion de novo. Romine v. Diversified Collection Servs., Inc.,
155 F.3d 1142, 1145 (9th Cir. 1998).
DISCUSSION
[1] The issue before us is whether a collection notice that
requires disputes to be set forth in writing violates 15 U.S.C.
§ 1692g. Under § 1692g(a), a debt collector must send a con-
sumer debtor, within five days of its initial attempt to collect
any debt, a written notice containing:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is
owed;
(3) a statement that unless the consumer, within
thirty-days after receipt of the notice, disputes the
validity of the debt, or any portion thereof, the debt
will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that
the debt, or any portion thereof, is disputed the debt
collector will obtain verification of the debt or a
copy of a judgment against the consumer and a copy
of such verification or judgment will be mailed to
the consumer by the debt collector; and
16236 CAMACHO v. BRIDGEPORT FINANCIAL INC.
(5) a statement that upon the consumer’s written
request within the thirty-day period the debt collec-
tor will provide the consumer with the name and
address of the original creditor, if different from the
current creditor.
15 U.S.C. § 1692g(a)(1)-(5) (emphasis added).
[2] Section 1692g(b) further provides that if the consumer
notifies the collector of a dispute in writing within the 30-day
period, the collector shall cease collection activities until he
obtains the verification or information required by 15 U.S.C.
§ 1692g(a)(4) and (5).
Bridgeport Financial argues that its collection notice meets
the notice requirements of § 1692g(a)(3) because the subsec-
tion must be interpreted as requiring written notice in order
for the procedure in § 1692g(a)(3) to be consistent with the
debt validation mechanisms provided in the later subsections
of § 1692g. Camacho argues, however, that since
§ 1692g(a)(3) does not explicitly include a writing require-
ment, Bridgeport Financial’s version of the collection notice
misrepresents the debtor’s rights.
[3] Whether a consumer’s dispute of the validity of a debt
under the FDCPA must be in writing is a question of first
impression in this circuit.2 The only other circuit to address
the issue has held that “given the entire structure of section
2
This circuit has stated that, “If no written demand is made, the collector
may assume the debt to be valid.” Mahon v. Credit Bureau of Placer
County Inc., 171 F.3d 1197, 1202 (9th Cir. 1999) (internal quotation
marks and citation omitted). The statement in Mahon, however, was made
in the context of a discussion of § 1692g(b), which has an explicit writing
requirement, not in the context of discussing § 1692g(a)(3). See Sambor
v. Omnia Credit Servs., Inc., 183 F. Supp. 2d 1234, 1240 n.4 (D. Haw.
2002) (explaining why Mahon is inapplicable to analysis of subsection
(a)(3)). Additionally, the statement in Mahon was dicta and therefore is
not binding. See id.CAMACHO v. BRIDGEPORT FINANCIAL INC. 16237
1692g, subsection (a)(3) must be read to require that a dis-
pute, to be effective, must be in writing.” Graziano v. Harri-
son, 950 F.2d 107, 112 (3d Cir. 1991).3 Because we conclude
that we must give effect to the plain meaning of the statute,
we respectfully disagree with Graziano.
The Supreme Court’s approach to statutory interpretation in
Lamie v. United States Trustee, 540 U.S. 526 (2004), guides
our analysis. In Lamie, the Supreme Court addressed the
omission of the phrase “or to the debtor’s attorney” from 11
U.S.C. § 330(a)(1), which provides for the payment from the
bankruptcy estate of reasonable fees to “a trustee, an exam-
iner, a professional person employed under section 327 or
1103.” Id. at 530. Inclusion of the phrase “or to the debtor’s
attorney” would have made the language parallel with other
parts of the statute that referred to “attorney,” and more com-
patible with the previous version of the statute. Id. at 530-31.
Further, the statute as it stood was ungrammatical, which
“strengthen[ed] the sense that error exist[ed].” Id. at 531.
Despite this evidence of legislative error, the Supreme Court
refused to insert the phrase. Id. at 535, 542. In reaching this
conclusion, the Court examined the statute’s plain meaning,
whether the plain meaning would lead to absurd or unreason-
able results, and legislative intent.
First, the Court looked to the text of the statute, which
omitted the reference to a debtor’s attorney. Id. at 534. The
Court found that since the plain meaning did not alter the
text’s substance or obscure its meaning, the plain meaning
was not inconsistent with the statute. Id. at 535. The Court
reasoned that absent sufficient indications to the contrary, it
should refrain from inserting language into a statute, even if
it suspected that Congress inadvertently omitted such lan-
3
Two district courts in this circuit have held that a debt may be orally
disputed under § 1692g(a)(3). Sanchez v. Robert E. Weiss, Inc. (In re San-
chez), 173 F. Supp. 2d 1029, 1034 (N.D. Cal. 2001); Harvey v. United
Adjusters, 509 F. Supp. 1218 (D.Or. 1981).
16238 CAMACHO v. BRIDGEPORT FINANCIAL INC.
guage. Id. at 537. The Court went on to find that the plain
meaning did not lead to an absurd result because even without
the omitted language, compensation for attorneys was still
available. Id. at 536-37.
[4] “[W]hen the statute’s language is plain, the sole func-
tion of the courts — at least where the disposition required by
the text is not absurd — is to enforce it according to its
terms.” Id. at 534 (internal quotation marks and citations
omitted). The plain meaning of § 1692g is that debtors can
trigger the rights under subsection (a)(3) by either an oral or
written “dispute,” while debtors can trigger the rights under
subsections (a)(4) and (a)(5) only through written dispute.
[5] A statute need not contain parallel language in all of its
subsections in order to be internally consistent. Rather,
“[w]here Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it
is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.” Russello v.
United States, 464 U.S. 16, 23 (1983) (internal citation and
quotation marks omitted); see also Andreiu v. Ashcroft, 253
F.3d 477, 480 (9th Cir. 2001) (en banc). If Congress had
intended to impose a writing requirement in § 1692g(a)(3), it
could have done so in the subsection itself, as it did in the
later subsections of § 1692g(a). See 15 U.S.C. § 1692g(a)(4),
(5); Russello, 464 U.S. at 23. As in Lamie, the plain language
of the text of § 1692g(a)(3) does not state that the consumer
must dispute the debt in writing, and “where the disposition
required by the text is not absurd,” Lamie, 540 U.S. at 534,
we must enforce the statute according to its terms.
Further, the plain meaning of subsection (a)(3) does not
lead to absurd results because an oral dispute triggers multiple
statutory protections. We thus disagree with the Third Circuit
in Graziano, which found it absurd that an oral dispute could
rebut the presumption of validity but not trigger the verifica-
tion requirement under § 1692g(a)(4), or the identification
CAMACHO v. BRIDGEPORT FINANCIAL INC. 16239
requirement under § 1692g(a)(5). See Graziano, 950 F.2d at
112. Graziano’s determination that permitting an oral dispute
would render the system “incoherent,” failed to consider those
FDCPA rights that are triggered by an oral dispute.
Oral dispute of a debt precludes the debt collector from
communicating the debtor’s credit information to others with-
out including the fact that the debt is in dispute. 15 U.S.C.
§ 1692e(8); Brady v. Credit Recovery Co., 160 F.3d 64, 67
(1st Cir. 1998). Additionally, if a consumer owes multiple
debts and makes a payment, the debt collector is prohibited
from applying such payment to a debt which is in dispute. 15
U.S.C. § 1692h. Moreover, a debtor’s oral notification to a
debt collector entitles a debtor to relief under § 1692c(a)(1),
which bars communication with a debtor at “a time or place
known or which should be known to be inconvenient to the
consumer.” 15 U.S.C. § 1692c(a)(1); Fox v. Citicorp Credit
Servs., Inc., 15 F.3d 1507, 1516, 1516 n.10 (9th Cir. 1994)
(finding debt collector could be liable under § 1692c(a)(1) for
contacting debtor at work after consumer orally informed col-
lector not to do so).4
While there is much to be said for the Graziano court’s
conclusion that policy considerations weigh in favor of its
interpretation, see 950 F.2d at 112, under Lamie, we can only
insert language into a statute if the result of the statute’s plain
meaning is absurd. See 540 U.S. at 537-538. Because we con-
clude that the FDCPA’s statutory scheme, which assigns
lesser rights to debtors who orally dispute a debt and greater
4
Other courts have disagreed with Graziano by finding that
§ 1692g(a)(3) itself creates an affirmative obligation for debt collectors
that is triggered by oral dispute. See, e.g., Sanchez, 173 F. Supp. 2d at
1033-1034 (finding that oral dispute rebuts the presumption of validity,
and therefore triggers an obligation for debt collectors to find some evi-
dence of the debt’s validity). However, we need not reach the question of
whether § 1692g(a)(3) itself creates rights for debtors, as we have identi-
fied other rights within the Act that are triggered by an oral dispute.
16240 CAMACHO v. BRIDGEPORT FINANCIAL INC.
rights to debtors who dispute it in writing, is not absurd, we
are not at liberty to insert any additional language.
Finally, giving effect to the statute’s plain meaning is also
consistent with legislative intent. Congress’ intent in enacting
§ 1692g was to provide an alleged debtor with 30 days to
question and respond to the initial communication of a collec-
tion agency. Swanson v. S. Or. Credit Serv., Inc., 869 F.2d
1222, 1226 (9th Cir. 1988). This purpose is further advanced
by an interpretation that allows such response to be in either
written or oral form. Nor does the plain language of the stat-
ute frustrate the purpose of the statute by misleading or con-
fusing consumers. Collection notices that include the statute’s
verbatim language have been held not to be confusing. See,
e.g., Jang v. A.M. Miller & Assoc., 122 F.3d 480, 484 (7th
Cir. 1997) (holding that a collection notice that uses the exact
statutory language will not be considered false, misleading, or
deceptive). Consumers can comprehend the statute’s plain
language. We are not persuaded by Bridgeport Financial’s
conjecture that the plain meaning of § 1692g is confusing and
frustrates the Congressional purpose of protecting consumers.
CONCLUSION
[6] The district court correctly denied Bridgeport Finan-
cial’s motion to dismiss. The plain language of subsection
(a)(3) indicates that disputes need not be made in writing, and
the plain meaning is neither absurd in its results nor contrary
to legislative intent. Thus, there is no writing requirement
implicit in § 1692g(a)(3). Bridgeport Financial’s collection
notice violated § 1692g insofar as it stated that disputes must
be made in writing.
The order of the district court denying Bridgeport Finan-
cial’s motion to dismiss is AFFIRMED and the case is
remanded to the district court for further proceedings.