Sixth Circuit Widens Split on Benign Language Exception

 

The Sixth Circuit recently weighed in on whether there is a “benign language” exception to Section 1692f(8) of the Fair Debt Collection Practices Act (the “FDCPA”).  In Donovan v. FirstCredit, Inc., No. 20-3485, 2020 U.S. App. LEXIS 39798 (6^th Cir. Dec. 18, 2020), the Court joined the Third and Seventh Circuits in holding that Section 1692f(8)’s plain text unambiguously prohibits markings on envelopes other than those necessary for sending communications through the mail. 

In Donovan, the debt collector sent a letter with two glassine windows.  One of the windows revealed the consumer’s name and address. The other window revealed an empty checkbox followed by the phrase “Payment in full enclosed.”  Depending on how the letter was situated, this second window sometimes also revealed an additional empty checkbox followed by “I need to discuss this further.  My phone number is __________.”  Id. at *2-3.  The consumer filed suit alleging that the envelope created a risk that third parties would recognize that she was receiving mail from a debt collector and asserting, among other things, a violation of 15 U.S.C. § 1692f(8).  After pleadings closed, the district court granted the debt collector’s motion for judgment on the pleadings concluding that Section 1692f(8) should be read to include a “benign language” exception, relying upon 2004 decisions from the Fifth and Eighth Circuits.

On appeal, the Sixth Circuit reversed and sided with the more recent and contrary positions of the Third and Seventh Circuits.  See Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014); Preston v. Midland Credit Mgmt., Inc., 948 F. 3d 772 (7^th Cir. 2020).  In doing so, the Court determined that the plain text of §1692f(8) forecloses a “benign language” exception because: (a) the section is unambiguous; and (b) a literal reading of the section does not lead to an absurd result. 

In determining that the section was unambiguous, the Court dismissed the Fifth Circuit’s rationale for applying a “benign language” exception. The Court noted that the canons of statutory construction refute the Fifth Circuit’s interpretation of §1692f(8) which would prohibit “marking on the outside of the envelope that are unfair or unconscionable, such as markings that would signal that it is a debt collection letter and tend to humiliate, threaten, or manipulate debtors.”  Goswami c. American Collections Enter., 377 F.3d 488, 493 (5^th Cir. 2004).  The Court went on to state that the Fifth Circuit’s interpretation was unreasonable because §1692f(8)’s more specific provision takes precedence over the preface of §1692f and to read it otherwise, would violate the canon of surplusage. 

The Court likewise was dismissive of the debt collector’s argument (and by the same token, the rationale of the Eighth Circuit)  that a literal reading of §1692f(8) would lead to an absurd result.  The debt collector argued that a literal reading of §1692f(8) would lead to an absurd result because the provision simultaneously endorses the use of mail communications while prohibiting debt collectors from including language and symbols on their envelopes that are necessary for communicating by mail, including the consumer’s address. The Court disagreed and held that:

the provision's blanket prohibition is best understood as forbidding "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). 

Donovan, 2020 U.S. App. LEXIS 39798, at *15 (internal citations omitted).  The Court supported its rationale by looking to the stated purposes of the FDCPA.  The Court noted that “[p]rohibiting 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.’" Id. at *16 (internal citations omitted).

Donovan is the third circuit court in recent years to examine §1692f(8).  Each of these circuits has taken a restrictive view of the section - a trend the receivables industry should note and weigh when assessing the risks and conveniences of glassine envelopes, bar codes and the like.