On June 30, the Third Circuit Court of Appeals joined a number of federal judicial circuits in holding that immaterial misstatements do not violate the Fair Debt Collection Practices Act (FDCPA).

In this case, Plaintiff defaulted on her loan, and Defendant – a debt collector – obtained a default judgment against her.  Defendant then attempted to collect on that judgment by serving Plaintiff with an information subpoena.  The information subpoena was a sample “form” and contained a signature line for the clerk of the enforcing court – the Superior Court of New Jersey.  However, instead of listing the clerk’s name on the signature line, Defendant listed the name of a person who was not a clerk of the Superior Court.  Plaintiff filed a class action lawsuit under the FDCPA, which prohibits making false, misleading, or deceptive statements in the collection of consumer debts.  The District Court granted summary judgment in favor of Defendant on the grounds that the misuse of the County Clerk’s name was immaterial, and Plaintiff appealed.

The Third Circuit Court of Appeals began with observing that Plaintiff “is obviously correct as a factual matter, insofar as using Terrence Lee’s name is a ‘false representation’ in the most technical sense of the phrase” because Terrence Lee is not the Clerk of the Superior Court.  However, this acknowledgment of technical falsehood does not end the inquiry because a false statement is only actionable under the FDCPA if it has the potential to affect the decision-making process of the least sophisticated debtor.  “[I]n other words, it must be material when viewed through the least sophisticated debtor’s eyes” and “refusing to adopt this materiality requirement would be inconsistent with decades of [the Court’s own] jurisprudence employing the least sophisticated debtor standard.”  Accordingly, the Court affirmed the dismissal of Plaintiff’s FDCPA claims.

In reaching this conclusion, the Third Circuit has joined the Courts of Appeals for the Fourth, Sixth, Seventh, Ninth, and Eleventh Circuits, and we anticipate that this number will continue to expand.