I concur in the opinion other than part II.D. I would hold the demand for interest upon interest in PRA's complaint served as a false representation and constituted an unfair or unconscionable means to collect a debt, in violation of §§ 1692e and 1692f(1). Accordingly, I would reverse the dismissal of this claim against PRA.
PRA argues on appeal that use of the language "as allowed by law" shows it sought interest in the complaint addressing the Wal-Mart account only to the extent permitted by applicable law. PRA also argues placement of its demand in the prayer for relief makes the demand an aspirational request to the court rather than a potential misrepresentation to the debtor. As support for these conclusions, PRA cites several district court cases arguably consistent with its position. In reality, these arguments are specific examples of broader arguments our court has wrestled with in the past regarding the applicability of the FDCPA to various litigation-related activities and communications. See, e.g. , Hemmingsen v. Messerli & Kramer, P.A. , 674 F.3d 814 , 818 (2012) ("[The Supreme Court in] Heintz[ v. Jenkins , 514 U.S. 291 , 299, 115 S.Ct. 1489 , 131 L.Ed.2d 395 (1995) ] answered the question whether the FDCPA applies to a lawyer who regularly collects consumer debts through litigation. But the circuit courts have struggled to define the extent to which a debt collection lawyer's representations to the consumer's attorney or in court filings during the course of debt collection litigation can violate §§ 1692d-f.").
In Hemmingsen , we rejected any sort of categorical approach that might deem "false statements not made directly to the consumer debtor" immune from FDCPA scrutiny. Id. at 818. Rather, we adopted "a case-by-case approach," id. at 819, noting representations to attorneys or in pleadings arise "in a wide variety of situations," id. at 818, that "routinely come to the consumer's attention and may affect his or her defense of a collection claim," id. We ultimately held in Hemmingsen that the representations at issue, made in a summary judgment memorandum and affidavit, did not violate the FDCPA because they were made long after litigation commenced and were not representations likely to deter the debtor from mounting a "vigorous defense." Id. at 819. We also noted the FDCPA was not intended to destroy creditors' access to judicial remedies, and as such, creditors should be allowed to advance their arguments and attempt to present evidence without fearing FDCPA liability merely because a state court ultimately rejects a statement as unsupported in a summary judgment proceeding. Id.
As per Hemmingsen , we must assess how the hypothetical unsophisticated consumer will perceive the representations in a letter or complaint. I conclude the placement and wording at issue in the present case are not shielded from further scrutiny pursuant to the FDCPA. When receiving a demand letter, a debtor faces many choices: take no action, seek clarification, pay the amount demanded (or some other amount), seek relief or renegotiation, or hire counsel. Similarly, when receiving a civil complaint in a collection action, the debtor may take no action and accept a default judgment, mount defenses with varying degrees of vigor, proceed pro se , or proceed with counsel. The demands and allegations in the letters and complaints do not exist in a vacuum. They may well arrive in the hands of a debtor and affect a debtor's choice of action-deterring the debtor from mounting a defense or employing counsel. See Hemmingsen , 674 F.3d at 818 ("Though rarely made 'directly' to the consumer debtor, such representations routinely come to the consumer's attention and may affect his or her defense of a collection claim."). Further, such representations made to a consumer prior to the consumer's retention of counsel on the matter clearly are subject to the unsophisticated-consumer standard. See Powers , 776 F.3d at 573-74 .
Viewed in this light, understood as a statement to the consumer as well as to the court, and reasonably interpreted in favor of the plaintiff, PRA's use of the phrase "as allowed by law," within the context of the larger phrase "as allowed by law, at the statutory rate from and after July 20, 2010," should not be limited to the narrow and defendant-friendly construction meaning "if allowed by law." At the motion to dismiss stage, I am reluctant to presume the phrasing represents a good faith assertion of a legal theory only to the court. An unsophisticated consumer, without adopting an idiosyncratic or bizarre interpretation, easily could view the phrase "as allowed by law" as an affirmative representation that the relief or amount sought is, in fact, allowed. See Duffy , 215 F.3d at 874-75 (holding representations about the availability of remedies under state law can be actionable pursuant to the FDCPA). Simply put, PRA did not make an open-ended demand (language seeking "such additional relief as the court may allow") or clearly articulate hedging language (language such as "if allowed by law" or "to the extent a court may find it to be allowed by law") sufficient to pass muster under the unsophisticated-consumer standard. See, e.g. , Stratton , 770 F.3d at 451 (rejecting the argument that a demand in a complaint was merely a good faith argument to the court and concluding, "Saying [the debtor] owed $2630.95 plus whatever interest the court chooses to award is simply not the same as saying that [the debtor] owed $2630.95 plus 8% interest from the date [the original creditor] charged off her account.").
Similarly, the placement of a demand in a civil complaint's prayer for relief, styled as a concluding "whereas" clause, does not necessarily take the demand outside the scope of the FDCPA's protections. In so holding, I would reject the conclusion of the majority and the several courts cited above indicating that such a clause is a non-actionable request to the court rather than an actionable debt-collection activity. Rather, as per the instruction of Hemmingsen : we may not presume a statement categorically non-actionable pursuant to the FDCPA merely because it is a statement to a third party. Hemmingsen , 674 F.3d at 818 . Here the prayed-for relief stated "as allowed by law" in connection with a statutory rate of interest from a certain date. The prayer for relief was served upon the debtor and was not a vague demand for whatever the court might deem appropriate and consistent with applicable law. We therefore should not cut off Haney's claim at this early stage.