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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

RENETRICE R. PIERRE,
Individually and on Behalf
of others Similarly
Situated,

Plaintiff, Case No. 16 C 2895

v. Judge Harry D. Leinenweber

MIDLAND CREDIT MANAGEMENT,

INC., a Kansas Corporation,

Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiff Renetrice Pierre (“Pierre”) sued Defendant Midland

Credit Management, Inc. (“Midland”) on behalf of a class of plaintiffs

(Count I) and herself individually (Count II), alleging violations of

the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.

Pierre now moves for summary judgment as to liability on both counts.

(Pl.’s Mot., ECF No. 68.) Midland moves to strike (Def.’s Mot. to

Strike, ECF No. 79) certain paragraphs from the documents Pierre files

in support of her Motion. For the reasons stated herein, the Court

grants Pierre’s Motion for Summary Judgment and denies Midland’s

Motion to Strike.

I. BACKGROUND

Sometime in 2006 or 2007, Pierre opened and began to use a credit

card account with Target National Bank (“TNB”). (Pl.’s Statement of

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Facts (“SOF”), ECF No. 70 ¶ 11; Def.’s Resps. to Pl.’s SOF, ECF No. 81

¶ 11.) She eventually failed to pay off the balance (Pl.’s SOF ¶ 13)

and later defaulted in March or April 2008. (Def.’s Resps. to Pl.’s

SOF ¶ 14.) Thereafter, TNB sold the debt to Midland Funding, LLC, for

which Defendant Midland Credit Management, Inc. is a debt collector.

(Def.’s SOF Responses ¶¶ 7, 13.) In an effort to collect on that

debt, Midland sent a dunning letter to Pierre on September 2, 2015.

(Id. ¶ 17; see, Demand Let., Ex. 1 to Pl.’s Second Am. Compl. (“SAC”),

ECF No. 40-1.) Pierre maintains, without contradiction by Midland,

that the statute of limitations on a collection action for that debt

had run by the time Midland sent the letter. (See, Pl.’s SOF ¶¶ 26-

27; 735 ILCS 5/13-205.) That letter is the keystone in this case, so

some description of it is necessary. The letter stated a current

balance of $7,578.57 and listed Target National Bank as the original

creditor to the debt. (Demand Let.) The letter began by stating:

“Congratulations! You have been pre-approved for a discount program

designed to save you money.” (Id. (emphasis in original).) The letter

then presented three “options”: Option 1 offered 40% off the

advertised balance if Pierre paid by October 2, 2015; Option 2 offered

20% off if Pierre elected to make 12 monthly payments; and Option 3

invited Pierre to call Midland to discuss her options and perhaps pay

only $50/month on the debt. (Id.) Finally, the letter included the

following disclosure:

The law limits how long you can be sued on a debt. Because
of the age of your debt, we will not sue you for it, we
will not report it to any credit reporting agency, and

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payment or non-payment of this debt will not affect your

credit score.

Id.

II. DISCUSSION

Pierre filed this action alleging that Midland violated the Fair

Debt Collection and Practices Act, 15 U.S.C. § 1692, et seq. (the

“FDCPA”). She pressed both individual claims and putative class

claims, and on April 21, 2017, the Court certified a class of all

persons with Illinois addresses to whom Midland sent, from March 7,

2015 through March 7, 2016, a letter containing the disclosure laid

out above. (See, generally, Mem. Op. and Order, Apr. 21, 2017, ECF

No. 59.)

This opinion now rules on two Motions before the Court:

Pierre’s Motion for Summary Judgment as to liability on both Count I

(class claims) and Count II (individual claims), and Midland’s Motion

to Strike certain statements from the documents supporting Pierre’s

Motion. The Court addresses these in reverse order, and, for the

reasons stated below, denies Midland’s Motion to Strike and grants

Pierre’s Motion for Summary Judgment as to liability.

A. Midland’s Motion to Strike

To establish a prima facie case for an FDCPA violation, a

plaintiff must demonstrate (among other things, discussed below at

Part II.B.1) that she incurred a debt arising from a transaction

entered for personal, family, or household purposes. 15 U.S.C.

§ 1692a(5); Pantoja v. Portfolio Recovery Assocs., LLC, 78 F.Supp.3d

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743, 745 (N.D. Ill. 2015) (hereafter, “Pantoja I”) aff’d, 852 F.3d 679

(7th Cir. 2017) (hereafter, “Pantoja II”). Midland moves to strike

(ECF No. 79) certain paragraphs from Pierre’s declaration (ECF No. 72-

3) and her Statement of Facts (ECF No. 70), asserting that these

paragraphs state legal conclusions and not facts. Midland further

suggests that if these paragraphs are struck as it requests, the

result will be “fatal” to Pierre’s lawsuit. (Pl.’s Mot. to Strike

¶ 2.) In the paragraphs at issue, Pierre states: “From 2007 to 2008,

I used the TNB Card for personal, family, household items for me and

my son. I never used the TNB Card for anything other than personal,

family, household items, including for any business purpose” (Pierre

Decl., ECF No. 72-3 ¶¶ 4-5), and “[I] used the TNB Card only for

personal, family, household purposes.” (Pl.’s SOF ¶ 12.)

These statements may be lean, but in light of relevant case law

and the lack of contrary facts before the Court, they are sufficient

to demonstrate Pierre’s personal use of the card. In Pantoja I, the

defendant made the same argument Midland makes here: that the

plaintiff failed to demonstrate he accumulated the at-issue debt for

personal purposes. Pantoja I, 78 F.Supp.3d at 745-46. The Pantoja

plaintiff never actually used the credit card in question, but had

accumulated debt assessed from activation and late fees on the card.

Id. The court found that the plaintiff had adequately demonstrated a

consumer (i.e., personal purpose) debt because undisputed evidence

showed that the card was issued to the plaintiff personally, and no

evidence in the record “even remotely suggest[ed]” that the card was

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issued for anything other than household purposes. Id. at 746. In

another FDCPA case, the plaintiff noted in her deposition that she

used her credit to buy “gas, clothes, things like that.” Gomez v.

Portfolio Recovery Assocs., LLC, No. 15 C 4499, 2016 WL 3387158, at *2

(N.D. Ill. June 20, 2016). The defendant protested that the plaintiff

could not establish her personal use of the credit, but the defendant

cited no evidence to contradict plaintiff’s assertions, despite having

“every opportunity” to develop its evidence on this issue at the

plaintiff’s deposition. Id. The court ruled that merely questioning

the sufficiency of the plaintiff’s evidence was not a proper basis to

dispute assertions in a statement of facts and accordingly plaintiff’s

assertions of personal use were deemed undisputed pursuant to Local

Rule 56.1. Id.

Although the Court acknowledges that Pantoja and Gomez are not

identical to the case at bar, these are differences without

distinction. Pierre set forth that she used the (later defaulted-

upon) card — which the parties do not dispute was issued to her

personally, rather than to some business of hers — to buy household

items for herself and her son, and that she never used the card for

any business purpose. (Pierre Decl. ¶¶ 4-5; Pl.’s SOF ¶ 12.) Though

Midland takes issue with the sufficiency of that description, Midland

has not said it is untrue, nor has Midland put forward any evidence to

contradict it. Gomez, 2016 WL 3387158, at *2. And as in Gomez,

Midland did not pursue this issue when it had the opportunity during

Pierre’s deposition. Accordingly, Pierre’s assertion that her debt

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was consumer in nature is deemed an undisputed fact. N.D. Ill. Local

Rule 56.1. Midland’s Motion to Strike is denied.

B. Pierre’s Motion for Summary Judgment on Liability

On a summary judgment motion, the movant bears the burden of

establishing that there is no genuine dispute of any material fact and

that she is entitled to judgment as a matter of law. FED. R. CIV.

P. 56(a); Becker v. Tenenbaum-Hill Assocs., Inc., 914 F.2d 107, 110

(7th Cir. 1990). The court construes facts favorably to the nonmoving

party and grants the nonmoving party all reasonable inferences in its

favor. Bagley v. Blagojevich, 646 F.3d 378, 388 (7th Cir. 2011)

(quoting Ogden v. Atterholt, 606 F.3d 355, 358 (7th Cir. 2010)).

1. Count I: Class Action Claims

Pierre alleges that Midland’s letter violates the FDCPA because

it falsely represents the character and legal status of the debt, 15

USC § 1692e(2), it is a deceptive communication, 15 USC § 1692e(10),

and because Midland’s use of the letter was an unfair or

unconscionable means to attempt to collect a debt, 15 USC § 1692f. To

prevail on her Motion as to Count I, Pierre need only prove that the

class is entitled to summary judgment on any one of these bases.

Because the Court finds that she so prevails on Section 1692e(10), the

Court devotes its analysis to that issue.

To establish a prima facie case under the FDCPA, a plaintiff must

prove: she is a natural person or “consumer” who is harmed by

violations of the FDCPA; the debt arises from a transaction entered

for personal, family, or household purposes; the defendant is a debt

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collector; and the defendant has violated a provision of the FDCPA.

Pantoja I, 78 F.Supp.3d at 745 (citation omitted). Here, Pierre has

shown there is no genuine issue of material fact as to whether she is

a consumer who accrued her debt from a transaction entered into for

personal, family, or household purposes (see above, at Part II.A), and

that the defendant is a debt collector. (Def.’s Resps. to Pl.’s SOF

¶ 6.) Accordingly, the Court need only consider whether Pierre has

shown an FDCPA violation as a matter of law.

In Section 1692e cases, the plaintiff proves a violation by

showing that the debt collection language is misleading from the

perspective of an unsophisticated consumer. McMahon v. LVNV Funding,

LLC, 744 F.3d 1010, 1019-20 (7th Cir. 2014). The unsophisticated

consumer is “uninformed, naïve, and trusting, but possesses

rudimentary knowledge about the financial world, is wise enough to

read collection notices with added care, possesses reasonable

intelligence, and is capable of making basic logical deductions and

inferences.” Williams v. OSI Educ. Servs., Inc., 505 F.3d 675, 678

(7th Cir. 2007) (citations omitted) (internal quotation marks

omitted). Whether collection language would confuse an

unsophisticated consumer is an objective test. Id. at 677-78.

Plaintiffs in Section 1692e cases may prevail by showing that the

language is misleading or confusing on its face. When they cannot

show that the language is plainly misleading, plaintiffs can still

prevail by producing extrinsic evidence (such as consumer surveys) to

demonstrate that unsophisticated consumers do in fact find the

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language misleading or deceptive. Lox v. CDA, Ltd., 689 F.3d 818, 822

(7th Cir. 2012) (citing Ruth v. Triumph P’ships, 577 F.3d 790, 801

(7th Cir. 2009)). Finally, plaintiffs must show that the misleading

language is material. Lox, 689 F.3d at 826 (citing Hahn v. Triumph

P’ships, 557 F.3d 755, 757-58 (7th Cir. 2009)).

Pierre levies several arguments for how the dunning letter is

impermissibly misleading. One argument in particular persuades the

Court. When Midland sent Pierre the dunning letter in September 2015,

the statute of limitations on any debt collection action had passed.

735 ILCS 5/13-205. Pierre thus bore no legal responsibility to pay

that stale debt and could face no legal jeopardy whatsoever if she

refused to pay it. However, under Illinois law, had Pierre made a

partial payment or promised to repay that debt, she could have revived

the statute of limitations and subjected herself to the debt

obligation anew. Pantoja I, 78 F.Supp.3d at 746 (Ross v. St. Clair

Foundry Corp., 271 Ill. App. 271, 273 (Ill. App. Ct. 1933)). Pierre

argues that because the letter failed to warn of this possibility, the

letter is misleading as a matter of law. The Court agrees.

The parties do not dispute that Midland’s letter never warns of

the possibility that certain actions could breathe new life into

comatose debt. Instead, the parties argue at length over whether this

omission even matters. Put more finely: Pierre says such an omission

is fatal for Midland’s FDCPA defense; Midland argues that the FDCPA

does not require debt collectors to warn of the potential danger of

revival, and so the omission is of no moment. Midland has some

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authority for its argument, but that authority is not controlling here

and anyway runs contrary to an explicit ruling by the Seventh Circuit.

Midland leans heavily on a District of Kansas case in which its

argument prevailed. In Boedicker v. Midland Credit Mgmt., Inc., 227

F.Supp.3d 1235, 1236 (D. Kan. 2016), the plaintiff claimed that a

Midland dunning letter violated the FDCPA by failing to warn that

under Kansas law, a partial payment toward stale debt could renew the

statute of limitations. The Boedicker court awarded Midland summary

judgment, concluding that the FDCPA did not require such a warning.

Boedicker, 227 F.Supp.3d at 1241-42. But there are some problems with

Midland’s proposed application of that ruling to this case. First,

the Boedicker court read Pantoja I differently than the Seventh

Circuit did on appeal. Boedicker took care to distinguish Pantoja I,

but later concluded (in language that Midland now borrows) that “[n]o

case has determined that a debt collector must warn of a potential

revival of a time-barred claim.” Id. at 1241; Def.’s Resp. at 5. But

two years earlier, Pantoja I determined just that. Pantoja I found a

similar dunning letter deceptive under the FDCPA and observed:

Upon receipt of the letter the only reasonable conclusion

that an unsophisticated consumer (or any consumer) could
reach is that defendant was seeking to collect on a legally
enforceable debt, even if defendant indicated that it chose
not to sue. Nor would a consumer, sophisticated or
otherwise, likely know that a partial payment would reset
the limitations period, making that consumer vulnerable to
a suit on the full amount . . . [Further, the letter is
deceptive on its face because it] does not indicate when
the debt was incurred, only that “[b]ecause of the age of
your debt, we will not sue you for it and we will not
report it to any credit reporting agency.” The letter is
deceptive because it does not tell the consumer that the

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debt is time-barred and defendant cannot sue plaintiff to

collect it, rather, it implies that defendant has chosen
not to sue. Nor does it tell plaintiff that the effect of
making (or agreeing to make) a partial payment on a time-
barred debt is to revive the statute of limitations for
enforcing that debt.

Pantoja I, 78 F.Supp.3d at 746 (citing McMahon, 744 F.3d at 1021)

(emphasis added). Although this Court reads Pantoja I as imposing

exactly the requirement both Boedicker and Midland eschew, Pantoja II

eliminates any guesswork. In the Seventh Circuit, a debt collector

must indeed warn of a potential revival of a time-barred claim:

We agree with the district court’s two reasons for finding

that the dunning letter here was deceptive. First, the
letter does not even hint, let alone make clear to the
recipient, that if he makes a partial payment or even just
a promise to make a partial payment, he risks loss of the
otherwise ironclad protection of the statute of
limitations. Second, the letter did not make clear to the
recipient that the law prohibits the collector from suing
to collect this old debt. Either is sufficient reason to
affirm summary judgment for the plaintiff.

Pantoja II, 852 F.3d at 684 (emphasis added).

Midland next argues that even if a warning against possible

revival were required ordinarily, no such warning would be necessary

in this case because of Midland’s policy “never to revive the statute

of limitations after it expires.” (Def.’s Resp. at 8 (citing Def.’s

SOF ¶ 28, ECF No. 81).) Pierre takes umbrage with this defense on a

number of grounds, but the most persuasive of them is that revivals of

the statute of limitations are controlled not by Midland’s policies,

but by operation of law. See, Pantoja I, 78 F.Supp.3d at 746. A

revival would be a hazard to Pierre, who may face suit by Midland if

it changed its policies or by someone else if Midland sold Pierre’s

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debt to another, less principled collector. Further, the question in

FDCPA cases is whether the at-issue language would mislead or deceive

an unsophisticated consumer. McMahon, 744 F.3d at 1019. An

unsophisticated consumer would not know about the dangers of revival

(even assuming that Midland’s letter adequately advises consumers of

the statute of limitations in the first instance), and she would

certainly not know about Midland’s internal policies. Cf. Lox v. CDA,

Ltd., 689 F.3d 818, 825 (7th Cir. 2012) (finding, contrary to

collector’s contention, that an unsophisticated consumer may well

consider dunning letter’s discussion of possible fees a threat because

consumer would not know of legal procedure dictating that such fees

could not be imposed absent collector moving a court to do so).

Midland also relies on Boedicker for the proposition that because

neither the Consumer Fraud Protection Bureau nor the Federal Trade

Commission have determined that such warnings are necessary, Midland

is free to omit them. (Def.’s Resp. at 4-6 (citing Boedicker, 227

F.Supp.3d at 1240-41).) Specifically, Midland points to: an outline

of “proposals under consideration” at the CFPB that suggests that

revival warnings might actually compound consumer confusion, rather

than dispel it (Def.’s Resp. at 5-6); a consent order entered into

between Midland and the CFPB in which the CFPB mandated that Midland

use the disclosure language it used in the letter sent to Pierre

(Ex. A to Def. Resp., ECF No. 82-1); and an FTC consent decree which

did not require revival warnings, despite the FTC’s apparent earlier

consideration of requiring them in the decree. (Def.’s Resp. at 6

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n.10.) Though Midland never says so, it essentially argues that these

administrative impressions are entitled to Chevron or Skidmore

deference and should be adhered to. Chevron U.S.A., Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837 (1984); Skidmore v. Swift & Co.,

323 U.S. 134 (1944).

The Court cannot agree. First, the Seventh Circuit’s explicit

holding—that revival warnings are required—controls here. Pantoja II,

852 F.3d at 684. True, the Seventh Circuit did not consider in

Pantoja II whether the sources Midland cites are entitled to

deference. Pantoja I and II acknowledge the FTC consent decree

mentioned here by Midland, but only to distinguish the language

mandated therein from the language of the dunning letter Pantoja

considered. The Pantoja cases express no opinion as to the deference,

if any, that should be afforded the decree.

However, as Judge Edmond E. Chang points out, several courts in

this District have held that the consent decrees from both the FTC and

the CFPB to which Midland now points should be afforded no deference.

Harris v. Total Card, Inc., No. 12 C 05461, 2013 WL 5221631, at *7

(N.D. Ill. Sept. 16, 2013) (collecting cases); accord, Richardson v.

LVNV Funding, LLC, No. 16 C 9600, 2017 WL 4921971, at *4 (N.D. Ill.

Oct. 31, 2017) (stating that these decrees do not warrant Chevron

deference). Midland “cites no authority demonstrating that congress

gave the FTC or the CFPB rulemaking power under the FDCPA through the

filing and settling of lawsuits against debt collectors,” and Midland

has not explained how or if the CFPB “proposals” it identifies were

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ever adopted or endorsed by the CFPB, as opposed to remaining

proposals and nothing more. Harris, 2013 WL 5221631, at *7 (citing

Vulcan Constr. Materials, L.P. v. Fed. Mine Safety & Health Review

Comm’n, 700 F.3d 297, 315 (7th Cir. 2012)). The Court will not extend

deference on this basis to the sources cited by Midland.

As its final argument that it need not include a revival warning

in its disclosure, Midland says that in Illinois, a partial payment

does not revive the limitations period unless the paying party also

makes a new and express promise to pay. (Def.’s Resp. at 5 n.8.)

Pantoja II dealt with this also. The Seventh Circuit acknowledged

that though there is some “room for disagreement” about the scope of

Illinois law, that disagreement does not free debt collectors of the

requirement to warn about the danger of statute of limitations

revival. Pantoja II, 852 F.3d at 685. Whether a plaintiff makes a

new promise or simply tenders a partial payment, either action puts

her in a worse legal position than she would have been in had she done

nothing. Id. Either she has revived the statute of limitations by

her promise, or she has by her payment opened herself up to possible

suit in which she would have to challenge the collector’s reading of

uncertain Illinois law. Id.

One further step is required. Pierre must also show that the

dunning letter is materially misleading. Lox v. CDA, Ltd., 689 F.3d

818, 822 (7th Cir. 2012). Arguing against materiality, Midland makes

much hay of its claim that Pierre “never made any payments, [and] did

not do anything different as a result of the letter.” (Def.’s Resp.

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at 1 n.1.) Midland misses the point. Materiality does not hinge upon

whether the plaintiff actually acted in reliance on a confused

understanding, but rather whether the misleading letter “has the

ability to influence a consumer’s decision.” Lox, 689 F.3d at 827

(quoting O’Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938, 942

(7th Cir. 2011)) (internal quotation marks omitted). Such is the case

here. A consumer receiving this dunning letter may well choose to pay

up or promise to do the same, things she likely would not have done

but for her receipt and misunderstanding of the letter. Thus, the

letter may “lead to a real injury” — the newly revived vulnerability

to suit, especially — and so the letter is materially misleading. Id.

In Pantoja II and here, the collector’s silence about the

significant risk of losing the ironclad protection of the statute of

limitations renders the letter misleading and deceptive as a matter of

law. Pierre and the class members are thus entitled to summary

judgment as to liability on Count I.

2. Count II: Individual Claims

In Count II as in Count I, Pierre presses FDCPA claims based on

Sections 1692e and 1692f. Her rationale for those claims is different

here than in Count I, however, Count II’s claims focus on Midland’s

contested right to charge interest on Pierre’s debt. Pierre contends

that Midland has no such right, and so the dunning letter’s “current

balance,” which Pierre alleges includes over $1,500 in interest,

either falsely represents the debt amount (violating Section 1692e) or

reflects Midland’s attempt to collect an amount not expressly

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authorized by agreement or permitted by law (violating Section 1692f).

(SAC ¶¶ 31-45.)

However, as the Court has already determined that the class

Pierre represents is entitled to summary judgment as to liability in

Count I, and Counts I and II are both premised upon violations of the

FDCPA, the Court need not address the alternative arguments for

individual relief Pierre raises in Count II. Everyone in the class is

entitled to summary judgment on liability because they received the

FDCPA-violative letter. Pierre also received the letter, so she is

entitled to summary judgment on liability as well. Nothing more is

needed.

III. CONCLUSION

For the reasons stated herein, Defendant Midland’s Motion to

Strike is denied. Plaintiff Pierre’s Motion to Summary judgment as to

liability on both Counts I and II is granted.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

Dated: 2/5/18

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