17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2017 (Argued: October 2, 2017 Decided: July 23, 2018) Docket No. 17‐950‐cv

AARON COHEN, on behalf of himself and all others similarly situated, Plaintiff‐Appellant,

v.

ROSICKI, ROSICKI & ASSOCIATES, P.C., DITECH FINANCIAL LLC, Defendants‐Appellees.

Before: SACK, RAGGI, AND CARNEY, Circuit Judges.

Plaintiff‐Appellant Aaron Cohen appeals from a judgment entered

in favor of Defendants‐Appellees Ditech Financial LLC and Rosicki,

Rosicki & Associates, P.C., by the United States District Court for the

Eastern District of New York (Leonard D. Wexler, Judge). Cohen alleges

that the defendants violated the Fair Debt Collection Practices Act,

et seq., in connection with their attempt to initiate foreclosure

proceedings on his home. The district court granted the defendantsʹ

motions to dismiss. We conclude that Cohen has failed to state a claim 17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

under the Fair Debt Collection Practices Act. Accordingly, the judgment of

the district court is

AFFIRMED.

DANIEL A. EDELMAN, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, Illinois (Tiffany N. Hardy, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, Illinois; Shimshon Wexler, The Law Office of Shimshon Wexler, PC, Decatur, Georgia, on the brief), for Plaintiff‐ Appellant. HENRY MASCIA (Cheryl F. Korman, on the brief), Rivkin Radler LLP, Uniondale, New York, for Defendant‐Appellee Rosicki, Rosicki & Associates, P.C. MARTIN C. BRYCE, JR. (Adam P. Hartley, Alexander Kommatas, on the brief), Ballard Spahr LLP, New York, New York, for Defendant‐Appellee Ditech Financial, LLC. Mary McLeod, General Counsel, John R. Coleman, Deputy General Counsel, Steven Bressler, Assistant General Counsel, Nandan M. Joshi, Joseph Frisone, Counsel, Consumer Financial Protection Bureau, Washington, D.C., for Amicus Curiae Consumer Financial Protection Bureau, in support of Plaintiff‐Appellant. SACK, Circuit Judge:

The plaintiff, Aaron Cohen, brings this putative class action against Ditech

Financial LLC (ʺDitechʺ), Cohenʹs mortgage‐loan servicer, and Rosicki, Rosicki & 2

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

Associates, P.C. (ʺRosickiʺ), the servicerʹs law firm, alleging violations of the Fair

Debt Collection Practices Act (ʺFDCPAʺ),

et seq., in connection

with their attempt to initiate foreclosure proceedings on his home. The district

court (the late Leonard D. Wexler, Judge) granted the defendantsʹ motions to

dismiss. We conclude that the district court erred in dismissing Cohenʹs FDCPA

claims on the ground that the enforcement of a security interest through

foreclosure proceedings is not debt collection for purposes of the FDCPA. We

nevertheless affirm because Cohen has failed to plausibly allege that the

defendants violated the FDCPA.

BACKGROUND

Factual Background1

On or about August 11, 2005, Cohen obtained a mortgage loan of $359,650

from Sterling Empire Funding Associates, Ltd. (ʺSterlingʺ) to finance the

purchase of his personal residence in Pomona, Rockland County, New York.

Because Cohenʹs complaint was dismissed under Federal Rule of Civil Procedure 1

12(b)(6), we accept the facts alleged in the complaint as true for purposes of our review. Hutchinson v. Deutsche Bank Sec., Inc.,

(2d Cir. 2011). We also consider on review ʺany written instrument attached to the complaint, statements or documents incorporated into the complaint by referenceʺ; here, those include documents filed by Rosicki in its state mortgage foreclosure suit against Cohen.

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

Cohen has been in default on this mortgage since 2009. On June 1, 2010, Cohenʹs

mortgage and note was assigned to Countrywide/Bank of America, which on

June 10, 2013, transferred its rights in the mortgage and note to Green Tree

Servicing LLC (ʺGreen Treeʺ). Green Tree, through its attorney Rosicki, filed a

foreclosure action summons and complaint with respect to the mortgaged

property against Cohen in New York Supreme Court Rockland County on March

11, 2015. After the foreclosure action was filed, Green Tree changed its name to

Ditech.2 The defendants mailed copies of the summons and foreclosure

complaint to Cohen.

The complaint in the foreclosure action asserts that Green Tree is the

ʺholder of the subject note and mortgage, or has been delegated the authority to

institute a mortgage foreclosure action by the owner and holder of the subject

mortgage and note.ʺ Appʹx at 37. The summons states that Green Tree is ʺthe

creditor to whom the debt is owedʺ and provides that ʺ[u]pon your written

request within 30 days after receipt of this notice, Rosicki, Rosicki & Associates

P.C. will provide you with the name and address of the original creditor if

different from the current creditor.ʺ Appʹx at 34.

2 We use ʺDitechʺ and ʺGreen Treeʺ to refer to the same entity. 4

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

New York law requires foreclosure plaintiffs to file two additional

documents at the onset of a foreclosure proceeding. First, such a plaintiff must

attach to the complaint a ʺCertificate of Meritʺ signed by the plaintiffʹs attorney

that ʺcertif[ies] that the attorney has reviewed the facts of the case and that . . . to

the best of such attorneyʹs knowledge, information and belief there is a

reasonable basis for the commencement of such action and that the plaintiff is

currently the creditor entitled to enforce rights under such documents.ʺ N.Y.

C.P.L.R. § 3012‐b(a). Second, ʺ[a]t the time that proof of service of the summons

and complaint is filed with the county clerk, plaintiff shall file with the county

clerk a specialized request for judicial intervention (RJI), on a form prescribed by

the Chief Administrator of the Courts.ʺ

.12a(b)(1). The RJI must contain, inter alia, ʺthe name of the mortgage

servicer,ʺ and ʺshall request that a settlement conference be scheduled.ʺ

Here, Green Tree filed in Supreme Court the Certificate of Merit (the

ʺCertificateʺ) on March 11, 2015, the same date that the foreclosure complaint

was filed there. The Certificate was signed by Green Treeʹs attorney and certified

that Green Tree ʺis the creditor entitled to enforce rightsʺ under the mortgage

note and related documents. Appʹx at 93–94. Green Tree subsequently filed the

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

RJI with the court on March 26, 2015. Appʹx at 99–101. The RJI identifies the

nature of the action as a mortgage foreclosure proceeding and seeks a

ʺResidential Mortgage Foreclosure Settlement Conference.ʺ Appʹx at 99–100.

Cohen received copies of the Certificate and RJI from the defendants.

Cohen subsequently submitted a ʺqualified written requestʺ to Ditech

requesting information relating to the servicing of the loan.3 On September 23,

2015, Ditech sent Cohen a letter in response, which states that ʺ[t]he servicing of

the above account was transferred from Bank of America, N.A. to Ditech

effective June 1, 2013ʺ and that the account is owned by ʺFannie Mae.ʺ4 Appʹx at

110. The letter further explains, ʺPlease be aware Ditech did not originate nor

owns [sic] the account; it merely services it for a third party and can provide

information from the servicing transfer date forward.ʺ

Finally, the letter

advises Cohen that ʺthe owner does not service the account. All correspondence

and inquiries concerning the account should be addressed to the account

Under the Real Estate Settlement Procedures Act, a borrower who has a federally 3

related mortgage loan may submit a written request to the servicer of the loan requesting information relating to the servicing of the loan. Such a request for information is termed a ʺqualified written requestʺ and may impose on the loan servicer a duty to respond to the borrowerʹs inquiry.

(e)(1)(B). 4 The record does not appear to reflect the date on which Cohenʹs loan was sold to

Fannie Mae or by whom. 6

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

servicer, Ditech . . . . The servicer has authority to act on the ownerʹs behalf with

regard to the administration of the account and respond to any questions about

the account.ʺ

Procedural History

On December 1, 2015, Cohen filed this putative class action against Ditech

and its foreclosure counsel, Rosicki, seeking to recover statutory damages under

the FDCPA. See 15 U.S.C. § 1692k(a) (providing that a court may award up to

$1,000 in statutory damages for violation of the FDCPA). Cohen alleges that the

defendants violated two different provisions of the FDCPA by identifying Green

Tree, and not the Federal National Mortgage Association (ʺFannie Maeʺ), as the

creditor in the foreclosure complaint, Certificate, and RJI. Specifically, Cohen

alleges that the defendants violated 15 U.S.C. § 1692e, which prohibits false,

deceptive, or misleading representations made in connection with collecting a

debt, and 15 U.S.C. § 1692g(a), which requires debt collectors to provide debtors

with the name of the ʺcreditor to whom the debt is owedʺ within five days of an

ʺinitial communication with a consumer in connection with the collection of any

debt.ʺ

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The defendants moved to dismiss Cohenʹs complaint under Federal Rule

of Civil Procedure 12(b)(6). On March 24, 2017, the district court dismissed

Cohenʹs complaint, concluding that Cohen had failed to state a claim upon which

relief can be granted because the ʺenforcement of a security interest through

foreclosure proceedings that do not seek monetary judgments against debtorsʺ

does not qualify as debt collection within the scope of the FDCPA. Cohen v.

Ditech Fin. LLC, No. 15‐CV‐6828 (LDW),

, at *3,

, at *7–8 (E.D.N.Y. Mar. 24, 2017). The district court reasoned that

because ʺGreen Tree elected to commence an action to foreclose on the mortgage

and the ʹcommunicationsʹ at issue were made in the context of enforcing its

security interest . . . there was no attempt to enforce a debt actionable under the

FDCPA.ʺ

Cohen then timely filed this appeal.

DISCUSSION

I. Standard of Review

ʺWe review de novo a district courtʹs grant of a defendantʹs motion to

dismiss.ʺ City of Pontiac Gen. Empsʹ Ret. Sys. v. MBIA, Inc.,

(2d

Cir. 2011). To survive a motion to dismiss, a complaint ʺmust contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on its

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

face.ʺ Aschcroft v. Iqbal,

(2009) (internal quotation marks

omitted). ʺA complaint is also deemed to include any written instrument

attached to it as an exhibit, materials incorporated in it by reference, and

documents that, although not incorporated by reference, are integral to the

complaint.ʺ L‐7 Designs, Inc. v. Old Navy, LLC,

(2d Cir. 2011)

(brackets and internal quotation marks omitted).

II. Standing

Ditech argues that Cohen lacks standing under Article III of the

Constitution to bring this action. Because standing is a ʺthreshold matterʺ in

determining whether the district court had jurisdiction to hear and decide this

case, Anderson Grp., LLC v. City of Saratoga Springs,

(2d Cir. 2015)

(internal quotation marks omitted), we address standing at the outset of our

analysis.

To satisfy the ʺirreducible constitutional minimumʺ of Article III standing,

a plaintiff must demonstrate (1) ʺinjury in fact,ʺ (2) a ʺcausal connectionʺ between

that injury and the complained‐of conduct, and (3) a likelihood ʺthat the injury

will be redressed by a favorable decision.ʺ Lujan v. Defs. of Wildlife,

,

560–61 (1992) (internal quotation marks omitted).

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

According to Ditech, Cohen lacks standing because he has alleged only a

ʺbare [statutory] procedural violation, divorced from any concrete harm,ʺ which

is insufficient to satisfy the injury‐in‐fact requirement under Spokeo, Inc. v. Robins,

(2016). Ditech Br. at 51. However, Spokeo does not

ʺcategorically . . . preclude[] violations of statutorily mandated procedures from

qualifying as concrete injuries supporting standing.ʺ Strubel v. Comenity Bank,

(2d Cir. 2016) (citing Spokeo,

). It teaches,

instead, that in order ʺto determine whether a procedural violation manifests

injury in fact, a court properly considers whether Congress conferred the

procedural right in order to protect an individualʹs concrete interests.ʺ

ʺ[I]n

the absence of a connection between a procedural violation and a concrete

interest, a bare violation of the former does not manifest injury in fact.ʺ

However, ʺwhere Congress confers a procedural right in order to protect a

concrete interest, a violation of the procedure may demonstrate a sufficient ʹrisk

of real harmʹ to the underlying interest to establish concrete injury without ʹneed

[to] allege any additional harm beyond the one Congress has identified.ʹʺ

(emphasis and brackets in original) (quoting Spokeo,

).

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

Here, Cohen alleges that the defendants violated 15 U.S.C. §§ 1692e and

1692g. We have held in the wake of Spokeo, albeit in non‐binding summary

orders,5 that §§ 1692e and 1692g protect an individualʹs concrete interests, so that

an alleged violation of these provisions satisfies the injury‐in‐fact requirement of

Article III. See Zirogiannis v. Seterus, Inc., 707 F. Appʹx 724, 727 (2d Cir. Sept. 12,

2017) (summary order) (ʺ[W]e have no trouble concluding that § 1692g of the

FDCPA protects an individualʹs concrete interestsʺ (internal quotation marks and

brackets omitted)); Papetti v. Does 1‐25, 691 F. Appʹx 24, 26 (2d Cir. May 26, 2017)

(summary order) (concluding that plaintiffʹs allegations of violations of §§ 1692e

and 1692g by themselves entailed the concrete injury necessary for standing).

We reach the same conclusion here.

Congress enacted the FDCPA ʺto protect against the abusive debt

collection practices likely to disrupt a debtorʹs life.ʺ Simmons v. Roundup Funding,

LLC,

(2d Cir. 2010) (internal quotation marks omitted). Sections

1692e and 1692g further this purpose: the former secures a consumerʹs right to be

Although this Courtʹs rulings by summary order do not have precedential effect, see 5

2d Cir. Local R. 32.1.1(a), ʺdenying summary orders precedential effect does not mean that the court considers itself free to rule differently in similar cases,ʺ Jackler v. Byrne,

(2d Cir. 2011) (brackets omitted) (internal quotation marks omitted). In Jackler itself, though, we declined to follow the summary order in connection with which we made this observation. 11

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

free from ʺfalse, deceptive, or misleadingʺ practices by debt collectors, 15 U.S.C.

§ 1692e, and the latter requires a debt collector who solicits payment from a

consumer to provide the consumer with ʺa detailed validation noticeʺ so that he

may confirm that he indeed owes the debt and its amount before paying it,

Russell v. Equifax A.R.S.,

(2d Cir. 1996). Congress thus sought to

protect consumersʹ concrete economic interests in enacting these provisions.

Both of Cohenʹs FDCPA claims are based on the defendantsʹ allegedly

incorrect identification of Green Tree as the creditor in the foreclosure complaint,

Certificate, and RJI. Taken as true, this misrepresentation might have deprived

Cohen of information relevant to the debt prompting the foreclosure proceeding,

posing a ʺrisk of real harmʺ insofar as it could hinder the exercise of his right to

defend or otherwise litigate that action.6 See Strubel,

(explaining

that ʺconsumer who is not given notice of his obligations is likely . . . unwittingly

Ditech argues that Cohen ʺhas failed to demonstrate any injury that could have 6

possibly resulted from Ditechʹs failure to identify Fannie Mae as the creditorʺ and that this misinformation is too ʺtrivialʺ to cause harm. Ditech Br. at 53 (quoting Strubel,

). This argument goes to the materiality of the allegedly false information in the defendantsʹ communications. As discussed infra in Part IV, materiality is a requirement for a successful § 1692e cause of action. We do not consider this merits issue as part of our standing analysis. See, e.g., Whitmore v. Arkansas,

(1990) (“Our threshold inquiry into standing in no way depends on the merits of the [petitionerʹs] contention that particular conduct is illegal . . . .” (alteration in original) (internal quotation marks omitted)). 12

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

to lose the very . . . rights that the law affords himʺ (emphasis omitted)). We

conclude that Cohen has alleged an injury‐in‐fact and therefore has standing.

Accordingly, we proceed to the merits of this appeal.

III. The FDCPA and Mortgage Foreclosure Proceedings

We next address the district courtʹs conclusion that actions taken within a

foreclosure action do not categorically constitute debt collection within the scope

of the FDCPA. We disagree and join those of our sister circuits that have

concluded that a foreclosure action is an ʺattempt to collect a debtʺ as defined by

the FDCPA. See Kaymark v. Bank of Am., N.A.,

, 174–79 (3d Cir. 2015);

Glazer v. Chase Home Fin. LLC,

, 460–65 (6th Cir. 2013); Wilson v.

Draper & Goldberg, P.L.L.C.,

, 376–78 (4th Cir. 2006); see also Reese v.

Ellis, Painter, Ratterree & Adams, LLP,

, 1216–18 (11th Cir. 2012)

(concluding that letters threatening foreclosure are not exempt from the FDCPA

because ʺcommunication related to debt collection does not become unrelated to

debt collection simply because it also relates to the enforcement of a security

interestʺ); Kaltenbach v. Richards,

, 527–29 (5th Cir. 2006) (same).7

The Ninth Circuit has concluded that ʺenforcement of security interests is not always 7

debt collectionʺ within the scope of the FDCPA. Vien‐Phuong Thi Ho v. ReconTrust Co., NA,

(9th Cir. 2016). In Ho, the court decided that a trustee in a non‐ 13

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

We begin with the ʺlanguage employed by Congress and the assumption

that the ordinary meaning of that language accurately expresses the legislative

purpose.ʺ Gross v. FBL Fin. Servs., Inc.,

, 175–76 (2009) (internal

quotation marks omitted). The FDCPA defines ʺdebtʺ as ʺany obligation or

alleged obligation of a consumer to pay money arising out of a transaction in

which the money, property, insurance, or services which are the subject of the

transaction are primarily for personal, family, or household purposes.ʺ8 15

U.S.C. § 1692a(5). This provisionʹs ʺfocus on the underlying transaction indicates

that whether an obligation is a ʹdebtʹ depends not on whether the obligation is

secured, but rather upon the purpose for which it was incurred.ʺ Glazer,

. Cohenʹs payment obligations under the mortgage note fall within the

plain language of § 1692a(5): Cohen is a consumer who must pay money to the

judicial foreclosure scheme that does not allow for deficiency judgments was not engaged in ʺdebt collectionʺ under the FDCPA. Id. at 571–74. In McNair v. Maxwell & Morgan P.C.,

(9th Cir. 2018), however, the court subsequently observed that ʺHo does not . . . preclude FDCPA liability for an entity that seeks to collect a debt through a judicial foreclosure scheme that allows for deficiency judgmentsʺ and concluded that actions taken by a law firm within a judicial foreclosure proceeding constitute debt collection under the FDCPA.

(emphasis in original). The instant case is like McNair, rather than Ho, because it involves a judicial foreclosure and as discussed below, the applicable state law (New York) permits mortgagees to seek deficiency judgments. Thus, we have no occasion to decide here if we would follow Ho in the circumstances presented there. 8 ʺThe term ʹconsumerʹ means any natural person obligated or allegedly obligated to

pay any debt.ʺ 15 U.S.C. § 1692a(3). 14

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

mortgagee, and his obligation to do so arose from a transaction involving

property that is for Cohenʹs personal, family, or household purposes (the

mortgage note financed the purchase of his personal residence). See Reese, 678

F.3d at 1216–17; Wilson,

. Cohenʹs obligation to pay off the

mortgage note is therefore a ʺdebtʺ for purposes of the FDCPA.

The defendants argue that the foreclosure action and the foreclosure filings

at issue here—the complaint, summons, Certificate, and RJI—do not constitute

an attempt to ʺcollectʺ that debt. We disagree. To be liable under the relevant

substantive provisions of the FDCPA, §§ 1692e and 1692g, a debt collectorʹs

targeted conduct must have been taken ʺin connection with the collection of any

debt,ʺ 15 U.S.C. §§ 1692e, 1692g(a), i.e., ʺany obligation or alleged obligation of a

consumer to pay money,ʺ id. § 1692a(5). Thus, FDCPA liability is defined not in

terms of whether the relief sought is money or property, but in terms of whether

the debt collectorʹs communication with the consumer is in connection with that

consumerʹs obligation to pay money. In other words, the FDCPA does not make

a distinction between an obligation itself grounded in money or property, and an

obligation the breach of which can give rise to an award of money damages at

law or of a property interest at equity.

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Here, the purpose of the defendantsʹ foreclosure proceeding was to obtain

payment of the underlying mortgage note. Indeed, ʺevery mortgage foreclosure,

judicial or otherwise, is undertaken for the very purpose of obtaining payment

on the underlying debt, either by persuasion (i.e., forcing a settlement) or

compulsion (i.e., obtaining a judgment of foreclosure, selling the house at

auction, and applying the proceedings from the sale to pay down the

outstanding debt).ʺ Glazer,

(emphasis in original). Moreover,

mortgage foreclosure is contemplated in another portion of the statute. See 15

U.S.C. § 1692i(a)(1) (establishing venue requirements for a debt collector ʺin the

case of an action [brought by the debt collector] to enforce an interest in real

property securing the consumerʹs obligationʺ). We therefore conclude that

mortgage foreclosure meets the FDCPAʹs broad definition of ʺdebt collection.ʺ

The defendants counter that the foreclosure proceeding was not an

attempt to collect a debt because the purpose of the proceeding was to enforce a

security interest and obtain possession of property, rather than to obtain

payment on a debt. However, New York law gives mortgagors redemption

rights,

, and allows mortgagees to obtain deficiency

judgments if the proceeds from the foreclosure sale are less than the outstanding

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

debt,

§ 1371. These provisions indicate that the purpose of foreclosure is to

obtain payment on the underlying loan, rather than mere possession of the

subject property. Indeed, ʺ[s]uch remedies would not exist if foreclosure were

not undertaken for the purpose of obtaining payment.ʺ Glazer,

.

Moreover, contrary to the defendantsʹ assertions, a foreclosure proceeding

does not fall outside the scope of the FDCPA solely because it is an in rem legal

proceeding. As an initial matter, we have determined in previous cases that debt

collectors can be subject to FDCPA liability based on actions taken in legal

proceedings. See, e.g., Romea v. Heiberger & Assocs.,

(2d Cir.

1998) (holding that a rent demand notice, required by New York law as a

condition precedent to a summary eviction proceeding, was a ʺcommunicationʺ

to collect a debt within the meaning of the FDCPA); cf. Heintz v. Jenkins,

(1995) (concluding that ʺa lawyer who ʹregularly,ʹ through litigation, tries

to collect consumer debtsʺ is a ʺdebt collectorʺ under the Act (emphasis in

original)). Second, to accept the defendantsʹ argument and exclude in rem

proceedings from the scope of the FDCPA ʺwould create an enormous loophole

in the [FDCPA] immunizing any debt from coverage if that debt happened to be

secured by a real property interest and foreclosure proceedings were used to

17

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

collect the debt.ʺ Wilson,

; see also Kaymark,

; Reese,

678 F.3d at 1217–18. We therefore find it irrelevant that a mortgage foreclosure

action is an in rem action in equity rather than an in personam action at law.

We conclude that mortgage foreclosure, at least under the circumstances

presented here, constitutes debt collection under the FDCPA.

IV. Failure to State a Claim Under 15 U.S.C. § 1692e

We nonetheless affirm the dismissal of Cohenʹs § 1692e claim for failure to

state a claim. Section 1692e prohibits debt collectors from making ʺany false,

deceptive, or misleading representation or means in connection with the

collection of any debt.ʺ Cohenʹs principal allegation is that the defendants

violated § 1692e by falsely identifying Green Tree as the creditor with respect to

Cohenʹs mortgage in the foreclosure complaint, the Certificate, and RJI. The

defendants contend that Cohen failed to plausibly allege a violation of § 1692e

for two reasons. First, the defendants argue that the Certificate and RJI

accurately identified Green Tree as the creditor, so the defendants did not make

any false or misleading statements in connection with the collection of a debt. In

the alternative, the defendants contend that even if the identification of Green

18

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Tree as the creditor is false or misleading, it is not a material misrepresentation

and therefore not actionable under the FDCPA.

The defendantsʹ first argument requires us to consider whether the

defendantsʹ statement in the foreclosure documents that Green Tree is the

ʺcreditorʺ to whom Cohenʹs debt is owed was false or misleading. The FDCPA

excludes from its definition of creditor ʺany person to the extent that he receives

an assignment or transfer of a debt in default solely for the purpose of facilitating

collection of such debt for another.ʺ 15 U.S.C. § 1692a(4). Here, Green Tree

received the assignment of Cohenʹs loan on June 1, 2013, which was after Cohen

defaulted, in order to facilitate the collection of Cohen’s mortgage payments,

suggesting that Green Tree falls within § 1692a(4)ʹs exclusion and therefore is not

a creditor as defined by the FDCPA.

Green Tree nevertheless qualifies as a ʺcreditorʺ under New York law and

has standing to foreclose on Cohenʹs mortgage. New York law defines ʺcreditorʺ

as a ʺperson having any claim, whether matured or unmatured, liquidated or

unliquidated, absolute, fixed or contingent.ʺ

. A

servicer entitled to receive mortgage payments and to pursue foreclosure—even

on behalf of a third party—is a person having such a claim. See N.Y. U.C.C. § 3‐

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

301 (ʺThe holder of an instrument whether or not he is the owner may . . . enforce

payment in his own name.ʺ); Aurora Loan Servs., LLC v. Taylor,

,

360–61 (2015) (concluding that mortgage servicer in possession of note at time

foreclosure action commenced ʺwas vested with standing to forecloseʺ).

Accordingly, to determine whether the defendantsʹ identification of Green Tree

as the creditor was false or misleading, we would need to resolve this tension

between the different definitions of ʺcreditorʺ under the FDCPA and New York

law.

We do not resolve this issue here because even if the defendantsʹ creditor

statement was inaccurate, it would not be material and Cohenʹs § 1692e claim

therefore fails. Whether a communication is ʺfalse, deceptive, or misleadingʺ

under § 1692e ʺis determined from the perspective of the objective least

sophisticated consumer.ʺ Easterling v. Collecto, Inc.,

(2d Cir.

2012) (internal quotation marks omitted). Under this standard, ʺcollection

notices can be deceptive if they are open to more than one reasonable

interpretation, at least one of which is inaccurate.ʺ

(internal quotation marks

omitted). However, we have explained that ʺnot every technically false

representation by a debt collector amounts to a violation of the FDCPA,ʺ Gabriele

20

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v. Am. Home Mortg. Serv., Inc., 503 F. Appʹx 89, 94 (2d Cir. 2012) (summary order),

and ʺFDCPA protection does not extend to every bizarre or idiosyncratic

interpretation of a collection notice,ʺ Easterling, 692 F.3d at 233–34 (internal

quotation marks omitted).

Several of our sister circuits have held that the least sophisticated

consumer standard encompasses a materiality requirement; that is, statements

must be materially false or misleading to be actionable under the FDCPA. See

Jensen v. Pressler & Pressler,

(3d Cir. 2015); Elyazidi v. SunTrust

Bank,

(4th Cir. 2015); Donohue v. Quick Collect, Inc.,

, 1033–34 (9th Cir. 2010); Miller v. Javitch, Block & Rathbone,

(6th Cir. 2009); Hahn v. Triumph Pʹships LLC,

, 757–58 (7th Cir. 2009).

These courts have determined that a statement is material ʺif it is capable of

influencing the decision of the least sophisticated [consumer].ʺ Jensen,

; see also Hahn,

(ʺA statement cannot mislead unless it is

material, so a false but non‐material statement is not actionable.ʺ).

We cited this line of cases with approval in a summary order without

explicitly deciding that § 1692e incorporates a materiality requirement. See

Gabriele, 503 F. Appʹx at 94. We reach that conclusion here, adopting the

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

persuasive reasoning of these courts of appeals. As the Seventh Circuit

observed, ʺ[m]ateriality is an ordinary element of any federal claim based on a

false or misleading statement,ʺ and there is no ʺreason why materiality should

not equally be required in an action based on § 1692e.ʺ Hahn,

.

The FDCPA was designed to give consumers reliable information so that they

can make informed decisions about how to address debts, and ʺby definition

immaterial information neither contributes to that objective (if the statement is

correct) nor undermines it (if the statement is incorrect).ʺ

at 757–58. The

materiality requirement is thus a corollary to the well‐established proposition

that ʺ[i]f a statement would not mislead the unsophisticated consumer, it does

not violate the [FDCPA]—even if it is false in some technical sense.ʺ

(first brackets in original) (internal quotation marks omitted). In other words, ʺa

false statement is only actionable under the FDCPA if it has the potential to affect

the decision‐making process of the least sophisticated [consumer].ʺ Jensen,

. This materiality requirement furthers the dual purposes of the least

sophisticated consumer standard: the need to protect unsuspecting consumers

from unscrupulous debt collectors and the need to ensure that debt collectors are

22

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

not held liable ʺfor unreasonable misinterpretations of collection notices.ʺ

Clomon v. Jackson,

(2d Cir. 1993).

Applying this standard to the alleged misrepresentation here—the

defendantsʹ identification of Green Tree as the ʺcreditorʺ—we conclude that it

was immaterial and therefore not actionable under § 1692e. The materiality

inquiry focuses on whether the false statement would ʺfrustrate a consumerʹs

ability to intelligently choose his or her response.ʺ Donohue,

. As

we have explained, ʺ[o]ur case law demonstrates that communications and

practices that could mislead a putative‐debtor as to the nature and legal status of

the underlying debt, or that could impede a consumerʹs ability to respond to or

dispute collection, violate the FDCPA.ʺ Gabriele, 503 F. Appʹx at 94. By contrast,

ʺmere technical falsehoods that mislead no oneʺ are immaterial and consequently

not actionable under § 1692e. Donohue,

.

Here, there is no indication that the identification of Green Tree as the

creditor misrepresented the nature or legal status of the debt or undermined

Cohenʹs ability to respond to the debt collection. Although Ditechʹs response to

the qualified written request stated that Fannie Mae owned Cohenʹs mortgage

account, Green Tree was responsible for servicing the account. As the account

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

servicer, Green Tree had the right to collect mortgage payments and to pursue

foreclosure under New York law. Moreover, it is undisputed that the entity to

whom Cohenʹs payments on his debt were owed in the first instance was Green

Tree and that Green Tree was also the primary point of contact for any questions

Cohen may have had about his mortgage. See Appʹx at 110 (instructions to

Cohen in Ditechʹs response to Cohenʹs qualified written request that ʺ[a]ll

correspondence and inquiries concerning the account should be addressed to the

account servicer, Ditechʺ). On the facts reflected in the complaint and attached

documents, the false identification of Green Tree as the creditor would not have

caused even a highly unsophisticated consumer to suffer a disadvantage in

charting a course of action in response to the collection effort. Indeed, stating

accurately that Fannie Mae was the creditor to whom the debt is owed likely

would have caused confusion inasmuch as Cohen might then have been led to

believe—wrongly, of course—that he should make his monthly mortgage

payments to Fannie Mae.

We also think it significant that the challenged statements identifying

Green Tree as the creditor were made in filings in a foreclosure action in state

court. The ʺstate foreclosure process is highly regulated and court controlled,ʺ

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

and the ʺstate courtʹs authority to discipline will usually be sufficient to protect

putative‐debtors like [Cohen] from legitimately abusive or harassing litigation

conduct.ʺ Gabriele, 503 F. Appʹx at 96 n.1. Moreover, as we have noted, Green

Tree met the state law definition of ʺcreditor.ʺ The identification of Green Tree as

the creditor in the foreclosure filings was therefore accurate within the context of

New York foreclosure law. Under these circumstances, we think that the

identification of Green Tree as the ʺcreditorʺ should be viewed as false only

insofar as it results from the different definitions of ʺcreditorʺ in the FDCPA and

New York law.

Accordingly, although it may have technically been legally inaccurate to

say that Green Tree was the ʺcreditorʺ of Cohenʹs mortgage, considering the

definition of the term in § 1692a(4), this statement was not false or misleading in

any material way. The defendantsʹ identification of Green Tree as the creditor

was not deceptive as to the nature or legal status of Cohenʹs debt, nor would it

have prevented the least sophisticated consumer from responding to or

disputing the action.

We reach this conclusion based on the specific facts and circumstances of

this case, i.e. a mortgage servicer that qualifies as a creditor under state law and

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

that acts on behalf of a mortgage owner. We do not suggest that

misrepresentations concerning the identity of the creditor are categorically

immaterial. The identity of the creditor in debt collection communications can be

a ʺserious matter.ʺ Bourff v. Rubin Lublin, LLC,

(11th Cir.

2012). The ʺentity to which a debtor owes money potentially affects the debtor in

the most basic ways, such as what the debtor should write after ʹpay to the order

ofʹ on the payment check to ensure that the debt is satisfied.ʺ Eun Joo Lee v.

Forster & Garbus LLP,

(E.D.N.Y. 2013). A

misrepresentation concerning the creditorʹs identity in debt collection notices can

cause a debtor ʺconfusion and delay in trying to contact the proper party

concerning payment on her loan and resolution of the problem.ʺ Wallace v. Wash.

Mut. Bank, F.A.,

(6th Cir. 2012); see also Tourgeman v. Collins Fin.

Servs., Inc.,

, 1121–22 (9th Cir. 2014) (similar). Here, however, the

facts and circumstances of the foreclosure proceeding and the foreclosure filings

at issue in this lawsuit admit no plausible claim that the challenged

misrepresentation of Green Tree rather than Fannie Mae as the creditor

undermined Cohenʹs—or any other similarly situated mortgagorʹs—ability to

respond to the debt.

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

V. Failure to State a Claim Under 15 U.S.C. § 1692g

We also affirm the district courtʹs dismissal of Cohenʹs § 1692g claim for

failure to state a claim upon which relief can be granted. Cohen claims that the

defendants violated § 1692g(a)(2), which requires a debt collector, in its initial

communication with the debtor, to identify the creditor to whom the debt is

owed. Cohen contends that the Certificate and RJI9 were initial communications

as defined by § 1692g(a) and that because the defendants failed to identify the

correct creditor in these documents, they are liable for damages under the

FDCPA. The defendants counter that Cohen failed to state a § 1692g claim

because the Certificate and RJI are exempt from the FDCPAʹs definition of initial

communications. The defendants rely on § 1692g(d), which provides that ʺ[a]

communication in the form of a formal pleading in a civil action shall not be

treated as an initial communication for purposes of subsection (a).ʺ This ʺbroad

exclusionʺ applies not only to ʺthe formal documents that make up a standard

pleading,ʺ but also to ʺany communication forming any partʺ thereof, including

Cohenʹs complaint alleges that the foreclosure complaint itself is a ʺcommunication[]ʺ 9

as defined by the FDCPA, Appʹx at 11, but he does not raise this argument on appeal so we consider it abandoned, see LoSacco v. City of Middletown,

(2d Cir. 1995). In any event, the foreclosure complaint falls squarely within § 1692g(d)ʹs exclusion for ʺformal pleadings.ʺ See Carlin v. Davidson Fink LLP,

(2d Cir. 2017). 27

17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

ʺexhibits attached to a complaint.ʺ Carlin v. Davidson Fink LLP,

(2d Cir. 2017).

We conclude that the Certificate falls within § 1692g(d)ʹs pleading

exclusion, and is therefore not an initial communication, because the defendants

were legally obligated to file this document with the foreclosure complaint. See

N.Y. C.P.L.R. § 3012‐b(a) (ʺIn any residential foreclosure action involving a home

loan . . . the complaint shall be accompanied by a certificate . . . certifying that the

attorney has reviewed the facts of the case and that . . . the plaintiff is currently

the creditor entitled to enforce rights under such documents.ʺ). In Carlin v.

Davidson Fink LLP,

(2d Cir. 2017), we held that documents

attached to a foreclosure complaint—even a superfluous attachment—are

covered by § 1692g(d)ʹs pleading exclusion. Therefore, under Carlin, legally

required filings accompanying a complaint are also exempt. The fact that the

Certificate is not denominated a ʺpleadingʺ under the Federal Rules of Civil

Procedure or the New York Civil Practice Law and Rules warrants no different

conclusion. As Carlin instructs, Congress adopted a ʺbroad exclusion that, on its

face, applies to any communication forming any part of a pleading.ʺ Id. (emphasis

added).

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

We also conclude that the RJI is not an initial communication as defined by

the FDCPA. The RJI is dated fifteen days later than the foreclosure complaint,

summons, and Certificate and it was not filed and served with the foreclosure

complaint, summons, and Certificate. New York law nevertheless requires a

foreclosure plaintiff to file the RJI at the time that proof of service of the

summons and foreclosure complaint is filed. See 22

.12a. New York law thus requires the RJI as part of the initial

assertion of a complaint seeking a foreclosure order, so the RJI can be viewed as

ʺforming [a] part of a pleading.ʺ Carlin,

. We conclude that

Carlinʹs reasoning applies not only to documents attached to an initial pleading

but also to those documents that state law mandates a plaintiff to file shortly

thereafter, and in relation to that pleading, to complete the initiation of the case.

Cohenʹs § 1692g claim therefore fails because the documents Cohen has

identified as defective initial communications—the Certificate and RJI—are not

initial communications as defined by the FDCPA.

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17‐950 Cohen v. Rosicki, Rosicki & Assocs., P.C.

CONCLUSION We have considered the partiesʹ remaining arguments on appeal and find

them to be without merit. For the foregoing reasons, we AFFIRM the judgment

of the district court.

30