Wilson v. Quadramed Corp

Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit

8-28-2000

Wilson v. Quadramed Corp
Precedential or Non-Precedential:

Docket 99-5758

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Filed August 28, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-5758

GEORGE WILSON, on behalf of himself and all others
similarly situated

v.

QUADRAMED CORPORATION

George Wilson,

Appellant

Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 99-cv-00095)
District Judge: Honorable William H. Walls

Argued July 17, 2000

Before: MANSMANN, RENDELL and STAPLETON,
Circuit Judges.

(Filed: August 28, 2000)
 Bruce D. Greenberg, Esquire
(ARGUED)
Joseph J. DePalma, Esquire
Allyn Z. Lite, Esquire
Mary Jean Pizza, Esquire
Lite, DePalma, Greenberg & Rivas
Two Gateway Center, 12th Floor
Newark, New Jersey 07102

Andrew R. Wolf, Esquire
1254 Highway 27
North Brunswick, New Jersey 08902

COUNSEL FOR APPELLANT

John K. Crossman, Esquire
(ARGUED)
Zevnik, Horton, Guibord, McGovern,
Palmer & Fognani, L.L.P.
1330 Avenue of the Americas,
11th Floor
New York, New York 10019

Lisa M. Campisi, Esquire
Zevnik, Horton, Guibord, McGovern,
Palmer & Fognani
50 Tice Boulevard
Woodcliff Lake, New Jersey 07675

John M. Agnello, Esquire
Carella, Byrne, Bain, Gilfillan,
Cecchi, & Stewart
6 Becker Farm Road
Roseland, New Jersey 07068

COUNSEL FOR APPELLEE

OPINION OF THE COURT

MANSMANN, Circuit Judge.

The question before us is whether the District Court
erred as a matter of law in holding that language contained
in a debt collection letter, which notified the debtor that his

2
account has been placed with the debt collector for
"immediate collection," and that it "shall afford [the debtor]
the opportunity to pay this bill immediately and avoid
further action against you," did not overshadow or
contradict the required validation notice under 15 U.S.C.
S 1692g(a) and, therefore, did not confuse or mislead the
"least sophisticated debtor" as to his statutory rights under
the Fair Debt Collection Practices Act to validate and
dispute the debt. The debtor has also asked this court to
certify a class under Fed. R. Civ. P. 23(a) and (b)(3) which
would allegedly consist of similarly situated debtors, i.e.,
debtors who received the same debt collection letter from
the debt collector.

Because we do not find any violation of section 1692g
here, we will affirm the judgment of the District Court.
Accordingly, we need not reach the debtor's request for
class certification.

I.

On or about September 1, 1998, defendant Quadramed
Corporation ("Quadramed" or the "debt collector"), on behalf
of Robert Wood Johnson Memorial Hospital (the "creditor"),
sent to the plaintiff, George Wilson ("Wilson" or the
"debtor"), a one-page letter notifying him that it was
attempting to collect a debt he allegedly owed to the
hospital for almost two years. The body of the letter
contains three paragraphs which read as follows:

Our client has placed your account with us for
immediate collection. We shall afford you the
opportunity to pay this bill immediately and avoid
further action against you.

To insure immediate credit to your account, make
your check or money order payable to ERI. Be sure to
include the top portion of this statement and place
your account number on your remittance.

Unless you notify this office within 30 days after
receiving this notice that you dispute the validity of
this debt or any portion thereof, this office will assume
this debt is valid. If you notify this office in writing

3
 within 30 days from receiving this notice, this office
will obtain verification of the debt or obtain a copy of
a judgement and mail you a copy of such judgement or
verification. If you request this office in writing within
30 days after receiving this notice this office will
provide you with the name and address of the original
creditor, if different from the current creditor.

All three paragraphs are printed in the same font, size and
color type-face. Approximately two inches above the body of
the letter with a flush right margin appears,"THIS IS AN
ATTEMPT TO COLLECT A DEBT. ANY INFORMATION
OBTAINED WILL BE USED FOR THAT PURPOSE." In
addition, the letter provides the debt collector's name and
address, the creditor's name, the date of service, balance
due and client account number. The letter closes with the
name of the Accounts Representative and her telephone
number. All of this information, other than the body of the
letter, is typed in all capital letters.

Wilson filed a purported class action suit, alleging that
the debt collection letter violates section 1692g of the Fair
Debt Collection Practices Act ("the Act"), 15 U.S.C. S 1692g.
Quadramed filed a motion to dismiss Wilson's complaint
under Fed. R. Civ. P. 12(b)(6). Wilson filed a cross motion
for partial summary judgment on liability and for class
certification.

The District Court, in a letter opinion dated August 25,
1999, granted Quadramed's motion to dismiss and denied
Wilson's motion for partial summary judgment and for
class certification. The District Court held that the "format
of the letter does not obscure the plaintiff 's rights under
the statute." Wilson v. Quadramed Corporation , No. 99-CV-
95, Letter Order at 7 (D. N.J. Aug. 25, 1999) ("Letter
Order"). In this regard, the District Court found that the
"validation notice appears on the front of the letter along
with the allegedly offending language and is written in the
same size font." Id. As to the substance of Quadramed's
letter, the court noted that the "letter does not make an
explicit demand for payment, but states that the defendant
`shall offer the plaintiff an opportunity' to make payment."
Id. Moreover, the court specifically found that the letter
does not request payment within a time period shorter than

4
the statutory thirty-day period. Thus, the court concluded
that the first two paragraphs of the letter did not contradict
the third, and that "even the least sophisticated debtor
would understand that he is being given a choice, that he
has options. . . . Such a debtor would not be mislead or
confused into foregoing his statutory rights." Id. at 8.

Thereafter, Wilson filed a timely notice of appeal.1 The
District Court's dismissal of this suit pursuant to
Fed.R.Civ.P. 12(b)(6) is subject to de novo review.2 Klein v.
General Nutrition Companies, Inc., 186 F.3d 338, 342 (3d
Cir. 1999); Weiner v. Quaker Oats Co., 129 F.3d 310, 315
(3d Cir. 1997). Accordingly, we must accept plaintiff 's
factual allegations as true and may affirm the District
Court only if it appears that the plaintiff cannot prove any
set of facts entitling him to relief. Klein, 186 F.3d at 342;
see also In re Westinghouse Securities Litigation , 90 F.3d
696, 706 (3d Cir. 1996) (citation omitted). Moreover, in
granting Quadramed's motion to dismiss, the District Court
also denied Wilson's cross-motion for partial summary
judgment as to liability and for class certification. Our
_________________________________________________________________

1. The District Court had jurisdiction pursuant to 28 U.S.C. S 1331 and
15 U.S.C. S 1692k(d). We have appellate jurisdiction under 28 U.S.C.
S 1291 as the District Court's Letter Order dated August 25, 1999
dismissed all claims with respect to all parties.

2. We note that the Seventh Circuit is the only court of appeals to have
held that whether an unsophisticated consumer would be confused by
allegedly contradictory or overshadowing language is a question of fact
which precludes dismissal under Fed.R.Civ.P. 12(b)(6). See Walker v.
National Recovery, Inc., 200 F.3d 500, 503 (7th Cir. 1999) (citing
Bartlett
v. Heibl, 128 F.3d 497 (7th Cir. 1997)) (other citations omitted). The
majority of courts to have considered this question have, however, held
that this determination involves a question of law. See, e.g., Terran v.
Kaplan, 109 F.3d 1428, 1432-33 (9th Cir. 1997) (determination of
whether language in collection letter overshadowed or contradicted
validation notice, like interpretation of language in contracts or similar
written documents, does not turn on the credibility of extrinsic evidence
and, therefore, presents a question of law to be reviewed de novo);
Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d 1222, 1225-26
(9th Cir. 1988); Russell v. Equifax A.R.S., 74 F.3d 30, 33, 35 (2d Cir.
1996). We agree with the majority that whether language in a collection
letter contradicts or overshadows the validation notice is a question of
law.

5
review of District Court's denial of the partial summary
judgment motion is de novo.3 We turn now to the merits of
this appeal.

II.

Although the debt collection letter here presents a close
question, we are not convinced that the language in the
first two paragraphs overshadows or contradicts the
validation notice such that the "least sophisticated debtor"
would be confused or mislead as to his rights to dispute or
seek validation of the debt.

A.

Under the Fair Debt Collection Practices Act, a debt
collector is required to include the following information in
a debt collection letter to a consumer:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is o wed;

(3) a statement that unless the consumer, within t hirty
days after receipt of the notice, disputes the validity of
the debt, or any portion thereof, the debt will be
assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies th e debt
collector in writing within the thirty-day period that the
debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy of
a judgment against the consumer and a copy of such
verification or judgment will be mailed to the consumer
by the debt collector; and

(5) a statement that, upon the consumer's written
request within the thirty-day period, the debt collector
will provide the consumer with the name and address
of the original creditor, if different from the current
creditor.
_________________________________________________________________

3. We do not reach the class certification issue raised by Wilson since we
will affirm the District Court's dismissal of the complaint under Fed. R.
Civ. P. 12(b)(6).

6
15 U.S.C. S 1692g(a). Paragraphs 3 through 5 of section
1692g(a) contain the validation notice--the statements that
inform the consumer how to obtain verification of the debt
and that he has thirty days in which to do so. The Act
further mandates the debt collector to cease all collection
efforts if the consumer provides written notice that he or
she disputes the debt or requests the name of the original
creditor until the debt collector mails either the debt
verification or creditor's name to the consumer. 15 U.S.C.
S 1692g(b).

Congress enacted the Act " `to eliminate abusive debt
collection practices' which `contribute to the number of
personal bankruptcies, to marital instability, to the loss of
jobs, and to invasions of individual privacy.' " Miller v.
Payco-General American Credits, Inc., 943 F.2d 482, 483-84
(4th Cir. 1991) (quoting 15 U.S.C. SS 1692a and 1692e).
Moreover, the debt validation provisions of section 1692g
were included by Congress to guarantee that consumers
would receive adequate notice of their rights under the law.
Id. at 484 (citing S. Rep. No. 382, 95th Cong., 1st Sess. 4,
8, reprinted in 1977 U.S. Code Cong. & Admin. News 1695,
1699, 1702).

Thus, in order to comply with the requirements of section
1692g, more is required than the mere inclusion of the
statutory debt validation notice in the debt collection letter
--the required notice must also be conveyed effectively to
the debtor. Id. (citing Swanson v. Southern Oregon Credit
Serv., Inc., 869 F.2d 1222, 1224 (9th Cir. 1988)); see also
Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir. 1991).
Moreover, the validation notice required by the FDCPA "is
to be interpreted from the perspective of the `least
sophisticated debtor.' " Graziano, 950 F.2d at 111 (citing
Baker v. G.C. Servs. Corp., 677 F.2d 775, 778 (9th Cir.
1982)).

Although we have not expounded upon the definition of
the "least sophisticated debtor," other courts of appeals
which have adopted that standard have. See, e.g., Savino v.
Computer Credit, Inc., 164 F.3d 81 (2d Cir. 1998); Russell v.
Equifax A.R.S., 74 F.3d 30, 34-35 (2d Cir. 1996); United
States v. National Financial Serv., Inc., 98 F.3d 131, 136
(4th Cir. 1996); Smith v. Computer Credit, Inc. , 167 F.3d

7
1052, 1054 (6th Cir. 1999); and Terran v. Kaplan , 109 F.3d
1428, 1431-32 (9th Cir. 1997). In Russell, the court of
appeals ruled that a validation notice "is overshadowing or
contradictory if it would make the least sophisticated
consumer uncertain as to her rights." 74 F.3d at 35. The
Court of Appeals for the Second Circuit elaborated that a
collection letter "is deceptive when it can be reasonably
read to have two or more different meanings, one of which
is inaccurate." Id.

As the court of appeals explained in Smith, the "least
sophisticated debtor" standard is " `lower than simply
examining whether particular language would deceive or
mislead a reasonable debtor.' " 167 F.3d at 1054 (quoting
Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d
1222, 1227 (9th Cir. 1988) (demand for payment within 10
days and threatening debtor's credit rating if not paid was
found to conflict directly with statutory validation
requirements)). In choosing the "least sophisticated debtor"
standard, another court of appeals has observed that this
standard "comports with basic consumer-protection
principles" enumerated by the United States Court of
Appeals for the Second Circuit as follows:

The basic purpose of the least-sophisticated-consumer
standard is to ensure that the FDCPA protects all
consumers, the gullible as well as the shrewd. This
standard is consistent with the norms that courts have
traditionally applied in consumer-protection law. . . .

National Financial Services, 98 F.3d at 136 (quoting Clomon
v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)). Thus,
although this standard protects naive consumers, it also
"prevents liability for bizarre or idiosyncratic interpretations
of collection notices by preserving a quotient of
reasonableness and presuming a basic level of
understanding and willingness to read with care." Id. (citing
Clomon, 988 F.2d at 1319).

Applying the "least sophisticated debtor" standard, we
noted in Graziano that "the notice must be in print
sufficiently large to be read, and must be sufficiently
prominent to be noticed." 950 F.2d at 111 (citing Swanson,
869 F.2d at 1225). For example, a collection letter will not

8
meet the requirements of the Act where the validation
notice is printed on the back and the front of the letter does
not contain any reference to the notice, or one in which the
validation notice is overshadowed or contradicted by
accompanying messages or notices from the debt collector.
Id.; Miller, 943 F.2d at 484 (citations omitted).

In Graziano, the debt collector was an attorney who
maintained a debt collection practice. The attorney sent
Graziano a notice of a delinquent debt which included the
required statements under section 1692g(a). The letter also
threatened legal action unless the debt was resolved within
10 days. The validation notice was printed on the reverse
side of the document; however, a statement appeared at the
bottom of the front page as follows: "See reverse side for
information regarding your legal rights!" We held that a
reasonable probability existed that "the least sophisticated
debtor, faced with a demand for payment within ten days
and a threat of immediate legal action if payment is not
made in that time, would be induced to overlook his
statutory right to dispute the debt within thirty days." Id.
(citing Swanson, 869 F.2d at 1225-26). Thus, we concluded
that a notice of rights is not effectively communicated to the
debtor when it is presented in conjunction with a
contradictory demand such as the one in Graziano.

B.

Wilson argues that the first two paragraphs of
Quadramed's letter overshadow and contradict the
validation notice set forth in the third paragraph. In
support of his argument, Wilson submits that the language
in Quadramed's letter is no less demanding and
contradictory than the debt collection letters found to have
violated the Act in Graziano, Savino, Miller, and Rabideau v.
Management Adjustment Bureau, 805 F.Supp. 1086 (W.D.
N.Y. 1992). Moreover, Wilson proffers three district court
decisions in support of his argument that a violation of
section 1692g may still be found even though the words,
"demand," "insist," or "command" are not used in a
collection letter, so long as the letters lead the least
sophisticated consumer to believe that "immediate
payment" must be made to avoid further action. See

9
Jenkins v. Union Corp., 999 F.Supp. 1120, 1132-33 (N.D.
Ill. 1998) (collectively, the language "URGENT," "assigned to
our agency for immediate collection," and the" `strong'
recommendation to contact the creditor to arrange for
payment," overshadowed the validation notice by creating a
confusing impression of urgency); Adams v. Law Offices of
Stuckert & Yates, 926 F.Supp. 521, 527 (E.D. Pa. 1996)
(debt collector misrepresented the nature of the consumer's
rights under the Act by raising the possibility of both a
lawsuit and damage to the debtor's credit rating in the
absence of "prompt payment" and warning debtor to pay
"immediately" in order to "avoid trouble"); and Velliard v.
Mednick, 24 F.Supp.2d 863, 869 (N.D. Ill. 1998) (court
found language stating creditor "shows this obligation to be
due immediately" was the same as stating "make payment
immediately" and therefore created confusion as to what
would happen if debtor disputed validity of the debt).4

We find that, contrary to Wilson's argument, the
collection letter did not violate section 1692g of the Act for
the reason that the first two paragraphs of the collection
letter neither overshadow nor contradict the validation
notice. First of all, upon review of the physical
characteristics and form of the letter, we have concluded
that the first two paragraphs of the letter do not
overshadow the validation notice. The validation notice was
presented in the same font, size and color type-face as the
first two paragraphs of the letter. Moreover, the required
notice was set forth on the front page of the letter
_________________________________________________________________

4. Both Jenkins and Velliard followed the Seventh Circuit's decision in
Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997). In Bartlett, the court of
appeals undertook a "confusion" analysis to determine whether an
unsophisticated debtor would be misled by the language in the collection
letter. The court explained that there were three possible means of
inducing confusion: (1) an actual contradiction; (2) overshadowing; and
(3) the "failure to explain an apparent though not actual contradiction"--
the third means being the most common. 128 F.3d at 500. The court
gave an example of the third type of confusion: where the letter both
demands payment within thirty days and explains the consumer's right
to demand validation within thirty days, confusion will result if the
letter
does not also explain how these two rights fit together. Id. Bartlett is
not
dispositive here since we have not found an actual contradiction,
overshadowing, or an apparent contradiction.

10
immediately following the two paragraphs that Wilson
contends overshadow and contradict the validation notice.
Accordingly, Wilson's overshadowing claim must fail.

Second, an actual or apparent contradiction between the
first two paragraphs and the third one containing the
validation notice does not exist here.5 Unlike the collection
letter in Graziano, which demanded payment within ten
days and threatened immediate legal action if payment was
not made in that time, Quadramed's letter makes no such
demand or threat. Instead, Wilson is presented with two
options: (1) an opportunity to pay the debt immediately and
avoid further action, or (2) notify Quadramed within thirty
days after receiving the collection letter that he disputes the
validity of the debt. As written, the letter does not
emphasize one option over the other, or suggest that Wilson
forego the second option in favor of immediate payment.
Thus, we find the least sophisticated debtor would not be
induced to overlook his statutory right to dispute the debt
within thirty days.

In so holding, we reject Wilson's argument that the
statement "afford[ing him] an opportunity to pay
immediately and avoid further action" is the equivalent of
demanding payment within a period of less than thirty
days. Indeed, in Burns v. Accelerated Bureau of Collections
of Virginia, Inc., 828 F.Supp. 475, 477 (E.D. Mich. 1993),
the district court found the request for payment
information did not overshadow the validation notice, nor
did it contain any information that directly conflicted with
the validation notice. The language of the collection letter
that the debtor claimed violated the Act stated:

THE ABOVE ACCOUNT HAS BEEN LISTED WITH THIS
AGENCY FOR IMMEDIATE COLLECTION. TIME IS OF
THE ESSENCE. THEREFORE IT IS IMPORTANT THAT
PAYMENT IN FULL FOR $3,547.46 BE MADE TODAY.

Id. at 476. The request for payment in Burns was
immediately followed by two paragraphs setting forth the
_________________________________________________________________

5. Because we find that a contradiction, either actual or apparent, does
not exist between the first two paragraphs and the third one, a
reconciling statement, as required in Bartlett , is not needed here.

11
validation notice, in slightly smaller type. The court found
that the request for payment did not contain a time limit.
Id. at 477. The court further found that the words "time is
of the essence" and "today" did not conflict with the thirty-
day time period, but merely communicated to the debtor
that the debt collector was interested in collecting the debt
in a timely fashion. Id. The court thus concluded that not
even the least sophisticated debtor would be mislead as to
his rights by the letter. Id.

Quadramed's letter is similar to the one in Burns which
was found not to have violated the Act. Both letters
contained the validation notice on the front of the letter
immediately following the contested language. Moreover,
Quadramed's use of the word "immediately" was similarly
used to convey its interest in collecting the debt in a timely
fashion. We do not believe the least sophisticated debtor
would interpret "afford you the opportunity to pay this bill
immediately" as a demand for payment in less than thirty
days, especially since this "opportunity" is followed, almost
immediately, by the required notice of the right to dispute
the debt.

In addition to Graziano, Quadramed's letter is
distinguishable from the collection letters at issue in
Savino, Miller, Rabideau, and Swanson, which were found
to violate the Act because they contained "screaming"
headlines or demands for payment within a period of less
than thirty days. In Savino, the allegedly misleading
language in the debt collection letter read as follows: "The
hospital insists on immediate payment or a valid reason for
your failure to make payment." Beneath the text of the
letter appeared the following notice: "PLEASE SEE
IMPORTANT NOTICE ON BACK." The validation information
required under section 1692g was set forth in this notice on
the back of the letter. The court of appeals concluded that
the debt collector's letter "violate[d] the FDCPA because the
language on the front of the [letter], when read in
conjunction with the statutory debt validation on the
reverse side, would `make the least sophisticated consumer
uncertain as to her rights.' " 164 F.3d at 85 (citing Russell
v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996)). In
reaching this conclusion, the court of appeals emphasized

12
that the debt collector's request for immediate payment did
not, standing alone, violate the Act. Id. at 85-86. The
violation of the Act consisted, rather, of the debt collector's
decision to ask for immediate payment without also
explaining that its demand did not override the consumer's
rights under section 1692g to seek verification of the debt.
Id. at 86.

The letter in Savino is distinguishable from Quadramed's
letter in two important respects: (1) the debt collector
"insists on immediate payment" and (2) the least
sophisticated debtor could easily overlook his statutory
right to dispute the debt because the required validation
notice appeared on the back of the letter and all that the
debtor is told on the front is to "[p]lease see important
notice on back." No indication is given on the front of the
letter as to the nature of the notice, i.e., the debtor's rights.
The language insisting on payment in the Savino letter
clearly overshadows the validation notice and would
mislead the least sophisticated consumer into foregoing his
statutory right to dispute the debt.

In Miller, the collection letter stated as follows. Across the
top of the page and in red, boldfaced type appeared,
"DEMAND FOR PAYMENT." In the middle of the page in
red, boldfaced type appeared, "THIS IS A DEMAND FOR
IMMEDIATE FULL PAYMENT OF YOUR DEBT," followed by,
in black boldfaced type, "YOUR SERIOUSLY PAST DUE
ACCOUNT HAS BEEN GIVEN TO US FOR IMMEDIATE
ACTION. YOU HAVE HAD AMPLE TIME TO PAY YOUR
DEBT, BUT YOU HAVE NOT. IF THERE IS A VALID
REASON, PHONE US . . . TODAY. IF NOT, PAY US --

NOW." 943 F.2d at 483. The word "NOW" covered the
bottom one-third of the page in white letters against a red
background. At the bottom of the page, in very small (one-
eighth of an inch) type, white letters against a red
background, appeared, "NOTICE: SEE REVERSE SIDE FOR
IMPORTANT INFORMATION." Id. The validation notice was
contained in the notice on the reverse side.

The court of appeals held that the language in the Miller
collection letter both contradicted and overshadowed the
required validation notice, thereby preventing effective

13
communication of the notice. Id. at 484. The court further
opined that the emphasis in the collection letter on
"immediate" action contradicts the thirty-day period under
the Act to dispute the debt. The court found that a
consumer who received this collection letter could easily be
confused between commands to respond "immediately,"
"now," and "today," and the thirty-day response period
provided by the Act. The court concluded that "[s]creaming
headlines, bright colors and huge lettering `all point to a
deliberate policy on the part of the collector to evade the
spirit of the notice statute, and mislead the debtor into
disregarding the notice.' " Id. (quoting Ost v. Collection
Bureau, Inc., 493 F.Supp. 701, 703 (D.N.D. 1980)). The
offending language in the Miller letter, as well as the format,
could not be more different from the Quadramed letter.

In Rabideau, two collection letters gave rise to a claimed
violation of the Act. The first letter contained the following
language:

REFERRAL. YOUR CREDITOR HAS REFERRED YOUR
ACCOUNT TO OUR COLLECTION AGENCY FOR
IMMEDIATE COLLECTION. THIS IS A DEMAND FOR
PAYMENT IN FULL TODAY. TO AVOID FURTHER
CONTACT, RETURN THE BOTTOM SECTION OF THIS
NOTICE WITH YOUR FULL PAYMENT TODAY! TO
DISCUSS THIS DEMAND, CALL THE NUMBER LISTED
BELOW.

805 F.Supp. at 1089. At the bottom of the front page was
a detachable coupon to be enclosed for payment.
Underneath the coupon, the following statement appeared:
"SEE REVERSE SIDE FOR IMPORTANT INFORMATION." Id.
at 1089-90. The validation notice was printed on the
reverse side in a light grey ink on a light shade of grey
computer paper, making it difficult to read, and in a type
size less than 1/10" in size. The front of the letter was
printed in a bolder type. The second letter in Rabideau
contained the following statements:

SECOND NOTICE. YOU HAVE BEEN PREVIOUSLY
NOTIFIED TO CLEAR THE BALANCE. TO AVOID
FURTHER COLLECTION MEASURES, YOUR
REMITTANCE IN FULL MUST BE IN THIS OFFICE

14
 WITHIN (5) DAYS OF RECEIPT OF THIS NOTICE.
SHOULD WE NOT HEAR FROM YOU, WE WILL
ADVISE THE CREDITOR THAT YOU HAVE REFUSED
TO PAY.

Id. at 1090.

The district court in Rabideau held that the demand for
immediate payment in both of the collection letters
overshadowed and contradicted the validation notice. Id. at
1094. The court held that the language in the first letter,
"that immediate payment will avoid further contact," is
contradictory to the statutory thirty-day period and a
misleading statement because immediate payment is not
the only step which may then be taken by the debtor to
avoid further contact. Id. With regard to the second letter,
the language demanding payment within five days of receipt
of the letter required the debtor to respond before the
expiration of the thirty-day period in violation of the Act.
Thus, the court concluded that by demanding immediate
payment without adequate notice of the debtor's right to
dispute the underlying debt, the collection letters
contradicted the validation notice contained in the letter. Id.
(citing our decision in Graziano, supra ). It is important to
note, however, that the court also held that the form of the
validation notice in Rabideau failed to apprise the least
sophisticated consumer adequately of the required notices.
Id. at 1093.

Just as the Savino letter encouraged the least
sophisticated debtor to overlook his statutory rights, so too
does the letter in Rabideau. The demand for immediate
payment coupled with the inadequate validation notice in
Rabideau create the confusion which misleads the least
sophisticated debtor in violation of the Act. On the other
hand, Quadramed's letter does not contain either an
immediate demand for payment or an inadequate validation
notice.

In Swanson, the following language appeared in bold-
faced type several times larger than the validation notice:

IF THIS ACCOUNT IS PAID WITHIN THE NEXT 10
DAYS IT WILL NOT BE RECORDED IN OUR MASTER

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 FILE AS AN UNPAID COLLECTION ITEM. A GOOD
CREDIT RATING-- IS YOUR MOST VALUABLE ASSET.
869 F.2d at 1225. The standard validation notice
immediately followed this statement in small, standard-face
type. The court of appeals found this notice to be
misleading in both form and content. In this regard, the
court of appeals explained:

The required debt validation notice is placed at the very
bottom of the form in small, ordinary face type,
dwarfed by a bold faced, underlined message three
times the size which dominates the center of the page.
More importantly, the substance of the language
stands in threatening contradiction to the text of the
debt validation notice. The prominence and message of
the "master file" and "most valuable asset" language,
lead the least sophisticated debtor, and quite probably
even the average debtor, only to one conclusion: he
must ignore his right to take 30 days to verify his debt
and act immediately or he will be remembered as a
deadbeat in the "master file" of his local collection
agency and will, accordingly, lose his "most valuable
asset," his good credit rating.

Id. at 1225-26. Because the letter in Swanson invoked a
shorter response period and promised harm to the debtor if
the debt remained unpaid after ten days, the court of
appeals held that the letter violated section 1692g as it
"represent[ed] an attempt `on the part of the collection
agency to evade the spirit of the notice statute and mislead
the debtor into disregarding the [required debt validation]
notice.' " Id. at 1226 (quoting Ost, 493 F.Supp. at 703). We
do not find any similarity between the letter in Swanson
and the letter in this case.

C.

Quadramed's letter is more closely analogous to the
collection letters in Burns, supra, Terran v. Kaplan, 109
F.3d 1428 (9th Cir. 1997), and Vasquez v. Gertler & Gertler,
Ltd., 987 F.Supp. 652 (N.D. Ill. 1997), which were found
not to have overshadowed or contradicted the validation
notice. In Terran, the debtor received a collection letter

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containing the following language: "Please be advised that
this office represents MONTGOMERY WARD CREDIT CORP
with whom you have an outstanding balance. . . . Unless
an immediate telephone call is made to J. SCOTT . . ., we
may find it necessary to recommend to our client that they
proceed with legal action." 109 F.3d at 1430. A validation
notice follows in the same size print.

In holding that the collection letter did not violate the
FDCPA, the Terran court held the request that the alleged
debtor immediately telephone a collection assistant did not
overshadow the language in the validation notice which
provided that the alleged debtor had thirty days to dispute
the debt. Id. at 1434. The court also noted that emphasis
was not placed on any particular statement except the
creditor's name and the name of the person to contact.
Moreover, the court found particularly significant the fact
that the challenged language does not require payment
"immediately," but merely requests a phone call. Id. The
court went on to note that a letter requesting the debtor
telephone the collection agency does not contradict the
thirty-day validation notice. According to the court, "[t]his
language simply encourages the debtor to communicate
with the debt collection agency. It does not threaten or
encourage the least sophisticated debtor to waive his
statutory right to challenge the validity of the debt." Id.

In reaching this conclusion, the Terran court noted that
every court of appeals case to have found a violation of
section 1692g in which the least sophisticated debtor
standard was applied involved a written communication
containing language which demanded payment within a
time period less than the statutory thirty-day period and
the demand was communicated in a format that
emphasized the duty to make payment and obscured the
fact that the debtor had thirty days to dispute the debt. Id.
at 1433 (citing National Fin. Servs., 98 F.3d at 139; Russell,
74 F.3d at 34; Graziano, 950 F.2d at 111; and Miller, 943
F.2d at 484).

Turning to Vasquez, we observe that the collection letter
there, after advising the debtor that the writer was retained
by the creditor to collect a debt from him, set forth the
required statutory thirty-day validation notice. After the

17
validation notice, the letter contained the following
statement: "Kindly let me have your immediate attention
and cooperation by sending me your payment or contacting
me without further delay." 987 F.Supp. at 655. The district
court did not find any violation of section 1692g for the
following reasons:

First, there is no direct contradiction -- nothing
demands payment or any other action within a period
shorter than thirty days. Nor does the letter contain
language that "overshadows" the notice by threatening
ominous action if Vasquez doesn't act quickly. There is
not even an apparent contradiction that fails to explain
how the thirty-day right to demand verificationfits
together with a creditor's rights. Instead, the letter
begins with the verification notice, right on the front of
the letter, and does not hide it with an obscure
reference to the reverse side of the letter, bury the
notice in small print, or encourage its disregard in any
way.

Id. at 657 (internal citations omitted). In contrast, the court
noted that the letter asked for the debtor's immediate
attention, a request that has never been found to violate
section 1692g. Id. Thus, "[i]nstead of demanding conduct
that is inconsistent with the debtor's thirty-day verification
rights," the court found that the letter "simply provides the
debtor with a possible course of action: payment (with no
specified time limit) or contact (also with no time limit)." Id.

Like the letters in Terran and Vasquez , Quadramed's
letter does not threaten or encourage the least
sophisticated debtor to waive his statutory right to
challenge the validity of the debt. Similarly, the letter here
does not demand payment within a period of less than
thirty days and the manner of presentation does not
undercut or overshadow the message of the validation
notice.

We are not persuaded to find a violation of section 1692g
here based on the holdings in Jenkins v. Union Corp.,
Adams v. Law Offices of Stuckert & Yates, or Velliard v.
Mednick, as Wilson suggests. All of these cases are
distinguishable factually and therefore inapposite. The

18
letters in both Jenkins and Velliard involved overshadowing
language which the district courts found created confusion
as to the debtor's right to dispute the debt. The Quadramed
letter does not create such confusion. The letter in Adams
misrepresented the nature of the consumer's rights under
the Act by raising the possibility of both a lawsuit and
damage to the debtor's credit rating in the absence of
"prompt" payment and warning the debtor to pay
"immediately" in order to "avoid trouble." In this case, the
letter does not contain any such threats which would
overshadow the validation notice.6 Accordingly, we reject
Wilson's argument to the contrary.

We hold, therefore, that neither the form nor the
substance of Quadramed's letter overshadowed or
contradicted the validation notice. Accordingly, as a matter
of law, we do not find any violation of section 1692g of the
Fair Debt Collection Practices Act based on the facts
presented here.

III.

For the reasons set forth above, we will affirm the
judgment of the District Court dismissing the complaint
pursuant to Fed.R.Civ.P. 12(b)(6) and denying Wilson's
_________________________________________________________________

6. In determining the urgency of a demand for payment, courts have
considered the nature of the threats of future action if payment is not
made within the demand period. For example, general threats of future
action against the debtor for nonpayment do not convey the same
urgency and pressure upon the debtor to pay as threats of immediate
legal action, reporting the debtor to the credit bureau, or causing a
negative credit rating. See, e.g., Adams v. Law Offices of Stuckert &
Yates, 926 F.Supp. 521, 527 (E.D. Pa. 1996). Where specific action is
threatened for nonpayment, the least sophisticated debtor might feel that
he has no other option but to pay, in which case such threats have been
found to overshadow the validation notice and cause the debtor to
overlook his statutory right to dispute the debt. Wefind the language in
Quadramed's letter, "avoid further action," does not convey a sense of
urgency or a threat of specific action which overshadows the validation
notice. Accordingly, we find the least sophisticated debtor in this case
would not feel pressured to overlook his statutory right to dispute the
validity of the debt after reading Quadramed's letter.

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motion for partial summary judgment and for class
certification.

A True Copy:
Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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