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Mishniot v. International Recovery Systems Ltd.

United States District Court, D. Nevada

February 22, 2017

Avihou Mishniot, Plaintiff
International Recovery Systems Ltd., doing business as National Recovery Systems, Defendant


          Jennifer A. Dorsey United States District Judge.

         Defendant National Recovery Systems (“NRS”) sent plaintiff Avihou Mishniot a letter asking him to pay an old gambling debt. Mishniot believed that, in sending this letter, NRS violated the Fair Debt Collection Practices Act (“FDCPA”), so he brought this case. I dismissed Mishniot's first complaint because he failed to allege sufficient facts to support his claims. He filed an amended complaint with a single claim under the FDCPA, and NRS moves to dismiss once again.

         Mishniot still fails to sufficiently allege his claims. He has not properly alleged that NRS is a debt collector under the FDCPA and that is reason enough to dismiss his complaint. But even if he had, Mishniot has not alleged that he suffered an injury concrete enough to confer standing on him. I thus grant NRS's motion to dismiss-this time with prejudice.[1]


         A. Motion-to-dismiss standards

         A properly pleaded complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”[2] While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.”[3] “Factual allegations must be enough to rise above the speculative level.”[4] To survive a motion to dismiss, a complaint must “contain [] enough facts to state a claim to relief that is plausible on its face.”[5]

         B. Mishniot fails to plausibly allege that NRS is a debt collector.

         To proceed with his claim under the FDCPA, Mishniot must adequately allege that NRS is a “debt collector” under that act.[6] A company can be a debt collector in two ways: (1) if “the principal purpose of [its business] is the collection of debts, ” or (2) if the company “regularly collects” debts on behalf of another.[7] Coupled with Rule 8's pleading standard, Mishniot must therefore allege specific facts to support a plausible inference that NRS meets one of these definitions.[8] It is widely recognized in this circuit that it is not even enough to merely include in the complaint a “conclusory allegation . . . that the principal purpose of [the defendant's business] is to collect on debts.”[9]

         Mishniot provides no specific facts to support NRS's debt-collector status under either theory. His allegations about NRS's business consist of two conclusory statements: (1) “NRS's principal purpose is purchasing defaulted consumer debts from original creditors, then collecting those purchased debts for profit”; and (2) “NRS regularly collects or attempts to collect consumer debts that were either assigned to NRS, or that NRS services on behalf of original creditors.”[10]These statements are nothing more than conclusory statements of law shrouded as facts, so I need not credit them. The best inference I can make from the complaint is that NRS has attempted to collect on one debt: Mishniot's-and that is not enough. I cannot plausibly infer that NRS's principal business is debt collection, nor can I infer that NRS regularly attempts to collect on others' debts. I thus dismiss Mishniot's complaint.

         C. In the alternative, Mishniot has not alleged that he has suffered a concrete harm that gives him standing to bring this claim.

         Mishniot contends that when NRS sent him a single letter asking him to pay a debt, it caused him an injury sufficient to confer federal-court standing. The Article III injury requirement “functions to ensure . . . that the scarce resources of the federal courts are devoted to those disputes in which the parties have a concrete stake.”[11] The plaintiff must show that he was injured in a concrete way.[12] Although a concrete injury need not be a tangible one, [14] the “plaintiff must allege facts, not mere legal conclusions, in compliance with the pleading standards established by Bell Atlantic Corp. v. Twombly.”[15]

         The Supreme Court has offered two additional guideposts for determining whether an intangible harm should be viewed as a concrete injury for purposes of Article III. First, Congress can “identify intangible harms that meet minimum Article III requirements.”[16] Although Congress does not automatically create standing merely by giving the public a right to sue when a defendant violates a statute, Congress's decision to protect against a certain injury can indicate that this injury is concrete for purposes of Article III.[17] Second, courts consider history: whether “an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.”[18] If a plaintiff alleges that the defendant's violation of a statute caused a harm similar to a traditional, concrete injury, the plaintiff likely has Article III standing.[19]

         None of Mishniot's allegations plausibly suggests that he was concretely injured when NRS sent him a single letter asking that he pay a debt. Mishniot's allegations about his injury consist of a sentence stating that NRS's letter caused him “embarrassment, frustration, personal humiliation, mental anguish, and anger.”[20] But these, too, are merely conclusory allegations devoid of any supporting facts-so I need not credit them. And even if I did, these harms are not enough. Mishniot offers no authority or analysis to suggest that Congress identified new concrete injuries in passing the FDCPA so that NRS's alleged violations of that statute are enough on their own. Nor has he shown that these harms are analogous to traditionally-recognized injuries.

         Mishniot also cites (without much explanation) to cases addressing standing under the Telephone Consumer Protection Act (“TCPA”).[21] These cases have held that violating the TCPA by harassing consumers with robodialers creates a concrete injury on its own.[22] I assume Mishniot meant to make the same argument with respect to violations of the FDCPA. But these TCPA cases are specific to the TCPA. Those courts explained that, in passing the TCPA, Congress identified robocalls as a concrete injury to consumers that it meant to curb.[23] And courts have emphasized that robocalls create harms that are similar to traditional injuries: they invade plaintiffs' privacy, rack up their ...

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