Judgment for a woman who was sent two debt collection notices by email has been affirmed by the 7th Circuit Court of Appeals, which found the emails did not contain statutorily required disclosures.
Beth Lavallee had two unpaid medial bills that were referred by a hospital to Med-1 Solutions, LLC for debt collection in 2015. The collection agency sent Lavelle two emails for each debt, respectively, but neither email contained immediate access to a .pdf file containing statutory disclosure obligations required under 5 U.S.C. § 1692g(a). Instead, Lavallee would have been forced to clink through various windows and download the file before finding the debt collection message.
Those files contained the amount of debt Lavallee owed, her rights to dispute the debts and how she could obtain more information about the alleged creditor. Lavallee, who said she had never seen the emails in her inbox, never actually opened them and therefore did not access the validation notice.
Lavallee first learned about her referred debts when the hospital called her about a third and separate unpaid bill. When she called Med-1 to discuss the debts, a Med-1 representative did not provide any § 1692g(a) disclosures or send a written notice in the days that followed.
She sued, alleging Med-1 violated § 1692g(a) by failing to deliver the mandatory disclosures orally during the telephone conversation or in writing thereafter. The U.S. District Court for the Southern District of Indiana granted Lavallee’s motion for summary judgment, finding the validation notices were never sent because Lavallee had never downloaded them. It pointed out that Med-1’s delivery method made notice of the receipts unlikely by embedding a hyperlink in an email from an unknown sender.
The 7th Circuit affirmed in Beth Lavallee v. Med-1 Solutions, LLC, 17-3244, finding the alleged statutory violation was meaningfully different from that in Paula Casillas v. Madison Avenue Associates, Inc., 17-3162.
“Unlike Casillas, who received an incomplete validation notice, Lavallee never received any of the disclosures required by § 1692g(a),” Circuit Judge Diane Sykes wrote for the panel. “Her right to contest or request verification of the debt — rights that Med-1 is bound by statute to disclose to every debtor — simply never came up.
“Without the knowledge that a consumer in her position is statutorily entitled to dispute and require verification of the debt on which the lawsuit was predicated, Lavallee stood at a distinct disadvantage. If she had known about her rights, she could have disputed and sought verification of the debts — thereby requiring Med-1 to cease the collection action and obtain verification,” the panel continued. “Because she was already a collection-suit defendant, it’s reasonable to infer that she would have exercised her statutory rights, thereby halting the collection litigation, if Med-1 had provided the required disclosures.”
Finding Med-1’s standing challenge meritless, the 7th Circuit further found that the collection agency’s act of emailing Lavallee was not a communication because it did not convey information regarding a debt. The panel also disagreed that the emails should count as communications because they contained the name and email address of the debt collector, and further concluded the emails did not themselves contain the disclosures.