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Date: 04-20-2018

Case Style:

Michelle Echlin v. PearceHealth, d/b/a PeaceHealth Southwest Medical Center

Western District of Washington Federal Courthouse - Seattle, Washington

Case Number: 15-35324

Judge: Diarmuid F. O’Scannlain

Court: United States Court of Appeals for the Ninth Circuit on appeal from the Western District of Washington (King County)

Plaintiff's Attorney: Brendan W. Donckers, Daniel F. Johnson, Thomas J. Lyons, Jr.

Defendant's Attorney: Bradley L. Fisher for PeaceHealth


Cassandra L. Crawford, Mark A. Stafford, Jeffrey L. Hasson for Computer Credit, Inc.

Description: We must decide whether, under the Fair Debt Collection
Practices Act, a company that sent letters demanding that
hospital patients pay their overdue medical bills meaningfully
participated in the hospital’s efforts to collect debts.
I
Michelle Echlin is a former patient of PeaceHealth
Southwest Medical Center (PeaceHealth) in Vancouver,
4 ECHLIN V PEACEHEALTH
Washington. Echlin received treatment at PeaceHealth on
two different occasions but never paid the nearly $1,000 in
medical bills she incurred as a result. After Echlin ignored
multiple requests for payment, PeaceHealth referred her
delinquent accounts to Computer Credit, Inc. (CCI), a
purported collection agency, for further action.
A
For a number of years, CCI and PeaceHealth operated
together under a “Subscriber Agreement” signed in 2004.
Under the agreement, PeaceHealth would refer delinquent
patient accounts to CCI and, for a fixed fee, CCI would
perform various services related to the debt-collection
process—primarily mailing letters demanding that the
patients pay their bills. During the time that an account had
been referred to CCI, PeaceHealth would suspend its in-house
collection efforts.1
When it referred an account to CCI, PeaceHealth would
give CCI the debtor’s name and address, the name of any
guarantor, the date of the service in question, and the amount
owed on the account. CCI would then independently screen
each account for potential collection problems (such as
staleness of the claim). CCI’s screening process was mostly
automated, though a CCI employee would personally review
at least some of the accounts for red flags. If an account
passed CCI’s screening process, CCI would then send the
1 CCI maintained similar arrangements with many other companies,
and held hundreds of thousands of active debtor accounts at a time. At
any given time, approximately 2,000 to 3,000 of those were accounts
referred from PeaceHealth, for a total of 17,500 to 18,000 PeaceHealth
accounts in the year preceding this lawsuit.
ECHLIN V PEACEHEALTH 5
debtor a letter advising her that the account had been assigned
to CCI for collection purposes and demanding payment.
CCI controlled the largely formulaic letter-mailing
process. Although PeaceHealth was generally aware of the
standard format of CCI’s letters, CCI alone controlled the
content of the letters it actually sent, and CCI did not seek
PeaceHealth’s approval prior to mailing. The letters were
written on CCI letterhead, they were mailed from CCI’s inhouse
mailing center, and they listed CCI’s address and
phone number (along with PeaceHealth’s contact information
under a section labeled “Creditor Detail”). The letters also
directed debtors to visit a website maintained by CCI, where
one could see more details about his or her debt, find
information about how to repay or to dispute the debt, and
submit electronic documents to CCI. Like the letters, the
website encouraged debtors to contact CCI by phone, fax, or
mail with questions.
CCI would mail up to two collection letters for each
PeaceHealth account. The first letter informed the debtor that
her account had been referred to CCI, “a debt collector,” for
collection and requested payment either by check, by a credit
card form included in the letter, or online at PeaceHealth’s
website. CCI itself had no ability to process or to negotiate
payments for PeaceHealth, but it would forward to
PeaceHealth any payments it received, including endorsing
checks made out to CCI, as necessary. CCI typically allowed
the debtor two weeks to respond to its first letter. If a debtor
made full repayment, CCI stopped all collection activity. But
if the debtor failed to pay or to respond within two weeks,
CCI would send a second letter, renewing its request that the
debtor settle the account. If, after another two to three weeks,
the debtor still had not paid her debt, CCI would refer the
6 ECHLIN V PEACEHEALTH
debt back to PeaceHealth and CCI’s activity on the account
would end.
Accounts sent back to PeaceHealth would often then be
referred to another company for additional action. As
PeaceHealth describes it, CCI’s activities were the first step
in a series of collections processes “up to and including the
point of an additional agency obtaining and executing on a
court judgment.” CCI did not participate in any of the later
collection steps.
CCI also handled correspondence—both in writing and
over the phone—from PeaceHealth debtors. In 2013, for
instance, CCI received 440 pieces of mail from PeaceHealth
debtors. When it received such mail, CCI would “review, act
on it, copy it,” and then forward it to PeaceHealth, though
CCI would not necessarily respond directly to the debtor
herself. For example, when it received written requests for
debt verification, CCI would contact PeaceHealth to verify
the validity of the debt and then either PeaceHealth or CCI
would send a letter responding to the debtor. CCI also trained
its staff personally to handle phone inquiries from debtors,
and CCI’s Collections Manager estimated that CCI handled
approximately 500 calls a week from debtors for all of its
clients combined.2 CCI personnel gave a variety of
information to callers, including clarifying basic details about
their debts, assisting in understanding their insurance
benefits, advising them to look into charity programs for
assistance in paying, and explaining the distinction between
a payment plan and a partial payment. CCI did not generally
reach out to debtors beyond the two letters, but CCI personnel
2 It is not clear from our record how many of those calls were from
PeaceHealth debtors specifically.
ECHLIN V PEACEHEALTH 7
would return calls to debtors if requested, and CCI sent
debtors various administrative notices, such as payment or
account-closure confirmations.
B
In early April 2013, PeaceHealth sent Echlin’s
information to CCI for assistance in collecting the debt from
her first treatment at PeaceHealth. On April 4, CCI assigned
Echlin’s debt a CCI account number and screened it for
barriers to collection. The next day, CCI sent an initial
collection letter to Echlin demanding payment. The letter
was written in the form described above and stated:
Your overdue balance with PeaceHealth . . .
has been referred to [CCI] for collection. . . .
This letter will serve to inform you that your
account remains unpaid and we expect
resolution of your obligation to [PeaceHealth].
The letter directed Echlin to remit payment in order to
“prevent further collection activity by” CCI. It also
instructed her to notify CCI within 30 days if she disputed the
validity of the debt.
Having received no response, CCI sent a second letter to
Echlin exactly two weeks later. The second letter was
substantially the same as the first but included the additional
notice:
This is our FINAL NOTICE and you must
take action to resolve this overdue account.
Pay the amount due to discharge your debt
8 ECHLIN V PEACEHEALTH
owed to [PeaceHealth]. . . . [T]his is our
LAST ATTEMPT to collect this debt . . . .
Echlin neither responded nor paid the debt, and CCI returned
the account to PeaceHealth on May 5.
CCI later sent Echlin another initial collection letter,
seeking payment from her second visit to PeaceHealth. This
time, Echlin sent a letter to CCI disputing the debt. CCI
never responded to Echlin’s letter but instead marked the
account disputed, determined that all further collection
activity should stop, and returned the account along with
Echlin’s letter to PeaceHealth.
C
On March 11, 2014, Echlin filed a putative class action3
against CCI and PeaceHealth, alleging violations of the Fair
Debt Collection Practices Act (FDCPA), “including but not
limited to 15 U.S.C. §§ 1692e and 1692j.” Specifically,
Echlin alleged that the letters she received “created a false or
misleading belief that Defendant CCI was meaningfully
involved in the collection of a debt prior to the debt actually
being sent to collections”—a practice commonly known as
flat-rating. She sought statutory damages, actual damages,
and attorneys fees.
CCI and PeaceHealth moved for summary judgment. In
response to CCI’s motion, Echlin continued to press her flatrating
claims but also argued that, even if such claims failed,
3 Echlin brought suit on behalf of herself and all other “consumers . . .
who received collection letters from defendants CCI and PeaceHealth
similar to [the letters Echlin received]” within the prior year.
ECHLIN V PEACEHEALTH 9
“CCI’s practices violate the statute in other ways.” She gave
one example, echoing a prohibition found in 15 U.S.C.
§ 1692e(5): “For instance, the FDCPA prohibits a debt
collector from using any false representation or deceptive
means to collect any debt and threatening to take any action
that cannot legally be taken or that is not intended to be
taken.” Echlin argued that CCI violated such prohibition by
threatening “‘further’ action against Mrs. Echlin if she
refused to pay her debt, but CCI had no actual authority to
take any action against [her] outside of sending a second
demand letter.”4
The district court granted CCI’s and PeaceHealth’s
motions for summary judgment. It ruled that the undisputed
evidence showed that CCI indeed did meaningfully
participate in the collection of Echlin’s debt, thereby
precluding any flat-rating claim. The court also struck the
§ 1692e(5) claim Echlin argued at summary judgment,
explaining that Echlin had not fairly raised such a claim in
her complaint and thus the defendants had no notice of the
claim and would have been substantially prejudiced if she
were allowed to add the new claim so far into litigation.
Although Echlin did not formally move to amend her
complaint, the court further determined that any amendment
would be futile, because at that point the new claim would
4 Echlin argued that such conduct violated both § 1692e(5)’s specific
prohibition against threatening to take action that is not intended or
authorized and § 1692e(10)’s broader prohibition against using any false
or deceptive means to attempt to collect a debt. Despite Echlin’s reference
to both statutory subsections, for ease of discussion we (like the district
court before us) refer to Echlin’s argument as a claim for a violation of
§ 1692e(5), because she focused on the specific type of conduct prohibited
by that subsection.
10 ECHLIN V PEACEHEALTH
have been barred by the FDCPA’s one-year statute of
limitations.
D
Echlin timely appealed and challenges the district court’s
rejection of both her flat-rating claims and her § 1692e(5)
claim for CCI’s allegedly false threats to take further
collection action against her. She also argues that she has a
viable claim under § 1692e(10) for CCI’s allegedly deceptive
inclusion of both its and PeaceHealth’s contact information
in the letters it sent her.
II
Echlin first argues that the district court erred in granting
summary judgment against her flat-rating claim that CCI’s
letters “created a false or misleading belief that Defendant
CCI was meaningfully involved in the collection of [her] debt
prior to the debt actually being sent to collections,” in
violation of 15 U.S.C. § 1692j.
Section 1692j prohibits a practice known as flat-rating,
whereby a third-party (usually for a flat rate) sells form letters
to a creditor, “which create[] the false impression that
someone (usually a collection agency) besides the actual
creditor is ‘participating’ in collecting the debt.” White v.
Goodman, 200 F.3d 1016, 1018 (7th Cir. 2000) (quoting
15 U.S.C. § 1692j(a)); see also Nielsen v. Dickerson,
307 F.3d 623, 639 (7th Cir. 2002) (“This provision bars the
practice commonly known as ‘flat-rating,’ in which an
individual sends a delinquency letter to the debtor portraying
himself as a debt collector, when in fact he has no real
involvement in the debt collection effort . . . .”). As the
ECHLIN V PEACEHEALTH 11
Seventh Circuit has described, the deception in such a
practice lies in giving debtors the false impression that, by
involving a third party in the collection process, “the creditor
does not intend to drop the matter,” and “Congress’s concern
was that such deception might induce debtors to abandon
legitimate defenses.” White, 200 F.3d at 1018. Because a
third-party flat-rater does not participate in the debt-collection
process, it, in effect, simply allows the creditor to use its
name “for its intimidation value.” Nielsen, 307 F.3d at 639.
Specifically, § 1692j makes it unlawful to:
design, compile, and furnish any form
knowing that such form would be used to
create the false belief in a consumer that a
person other than the creditor . . . is
participating in the collection of or in an
attempt to collect a debt such consumer
allegedly owes such creditor, when in fact
such person is not so participating.
15 U.S.C. § 1692j(a). There is no doubt that CCI furnished
form letters that were used to create the belief—indeed that
explicitly stated—that CCI was participating in an attempt to
collect the debts Echlin owed to PeaceHealth. The question
we must answer is whether there is sufficient evidence in the
record to support Echlin’s contention that this impression was
false—that is, whether there is any genuine issue of fact as to
whether CCI actually participated in PeaceHealth’s debtcollection
efforts. See id.; see also Nielsen, 307 F.3d at 640
12 ECHLIN V PEACEHEALTH
(“The premise of liability under section 1692j . . . is that the
‘flat-rater’ is not involved in debt collection.”).5
A
The statute does not define what it means for a person to
“participat[e] in the collection of or in an attempt to collect a
5 Echlin also alleged that the same conduct violated § 1692e’s
prohibition against a “debt collector” using “any false, deceptive, or
misleading representation or means in connection with the collection of
any debt.” The Act defines a “debt collector” as a person who “regularly
collects or attempts to collect . . . debts owed or due . . . another.”
15 U.S.C. § 1692a(6). Thus, if CCI were acting merely as a flat-rater (and
not actually participating in the collection of debts), it would be liable for
violations of § 1692j, but would not likely be a “debt collector” and thus
not liable also for violations of § 1692e. See, e.g., Vincent v. The Money
Store, 736 F.3d 88, 103 & n.16 (2d Cir. 2013).
Echlin argues, however, that PeaceHealth is itself liable for CCI’s
alleged flat-rating under § 1692e. Under the so-called false-name
exception, a creditor may be held liable as its own debt collector under
§ 1692e if, “in the process of collecting his own debts, [he] uses any name
other than his own which would indicate that a third person is collecting
or attempting to collect such debts.” 15 U.S.C. § 1692a(6). Some courts
have held that this standard is essentially the inverse of § 1692j: a creditor
who deceives debtors by hiring a third-party flat-rater is the de facto debt
collector and may therefore be liable for violations of § 1692e through the
false-name exception. See Vincent, 736 F.3d at 103 n.16; Gutierrez v.
AT&T Broadband, LLC, 382 F.3d 725, 738 (7th Cir. 2004). Thus, Echlin
argues, if CCI is liable for violating § 1692j, PeaceHealth is likewise
liable for violating § 1692e.
In any event, Echlin’s §§ 1692e and 1692j claims turn on the same
allegation: that CCI’s letters falsely suggested that CCI was “meaningfully
involved in the collection of” her debts. Our analysis of Echlin’s flatrating
claims under § 1692j therefore applies with equal force to her
parallel claims of misleading representations under § 1692e.
ECHLIN V PEACEHEALTH 13
debt” owed by the consumer. 15 U.S.C. § 1692j(a). A
“debt,” of course, is an obligation to pay someone money.
See 15 U.S.C. § 1692a(5); Ho v. ReconTrust Co., 858 F.3d
568, 571 (9th Cir. 2017). And to “collect” that debt simply
means to “gather” or to “exact” it from the debtor. See
Webster’s Third New International Dictionary 444 (1993);
Vincent v. Money Store, 736 F.3d 88, 100 (2d Cir. 2013). But
this does little to answer our question. There is no doubt that
Echlin owed a debt to PeaceHealth and that PeaceHealth was
trying to collect it from her. One could “participate” in—i.e.,
“take part” in, Webster’s Third New International Dictionary
1646 (1993)—that effort in any number of ways. Arguably,
CCI participated in the attempts to collect Echlin’s debts by
doing so little as drafting and mailing the collection letters to
her itself, rather than merely supplying letterhead to
PeaceHealth for mailing. See, e.g., Vincent, 736 F.3d at 116
(Livingston, J., concurring in part and dissenting in part)
(“[The statute’s] language clearly anticipates that a flat-rater
does not itself communicate with debtors. . . . [A] flat-rater
does not ‘send’ the forms to the debtor, nor is the flat-rater
the one that actually ‘uses’ the forms to deceive the debtor.”);
Gutierrez v. AT&T Broadband, LLC, 382 F.3d 725, 734 (7th
Cir. 2004) (“The classic ‘flat-rater’ effectively sells his
letterhead to the creditor . . . so that the creditor can prepare
its own delinquency letters on that letterhead.” (quoting
Nielsen, 307 F.3d at 633)).
Echlin contends—and other federal courts have
suggested—however, that CCI must do more than merely
mail form letters to “participate” sufficiently in debtcollection
efforts. The Second Circuit, for example, has
suggested that the relevant entity must “meaningfully”
participate in debt collection activities rather than “merely
operat[e] as a conduit for a collection process that the creditor
14 ECHLIN V PEACEHEALTH
controls.” Vincent, 736 F.3d at 101, 103 (internal quotation
marks omitted). The court opined that this likely requires
more than mailing form letters at the direction of a creditor,
criticizing arguments to the contrary as a relying on a “hypertechnical”
reading of the statute. See id. at 101. The Seventh
Circuit has likewise suggested that a debt collector must
“genuine[ly]” participate in the collection process and wrote
that § 1692j “bars the practice . . . in which an individual
sends a delinquency letter to the debtor portraying himself as
a debt collector, when in fact he has no real involvement in
the debt collection effort.” Nielsen, 307 F.3d at 635, 639.
The district court found that CCI “meaningfully”
participated in debt collection activities under § 1692j. The
record supports that ruling.
B
Echlin primarily argues that CCI did not meaningfully
participate in the attempts to collect her debts because CCI
did not engage in many of the hallmark activities of debt
collection. For example, CCI did not have authority to
negotiate or to process payments from debtors, it received no
proceeds from payments that were made, and it was not
involved in any further action that was pursued against
debtors whose accounts remained delinquent.
We are not persuaded that CCI must engage in such more
central debt-collection activities in order to participate
meaningfully in that process. Meaningful participation in the
debt-collection process may take a variety of forms. In
similar cases, for example, lower courts have applied a litany
of factors related to an entity’s participation in the debtcollection
process, including the amount of control the entity
ECHLIN V PEACEHEALTH 15
exercises over the collection letters it sends, the amount of
contact the entity has with debtors, whether the entity invites
and responds to debtor inquiries, whether the entity may
receive or negotiate payments, whether the entity receives or
retains full debtor files, and whether the entity is involved in
further collection activities if the debts remain unpaid. See,
e.g., Hartley v. Suburban Radiologic Consultants, Ltd.,
295 F.R.D. 357, 371–72 (D. Minn. 2013); Mazzei v. Money
Store, 349 F. Supp. 2d 651, 659–60 n.6 (S.D.N.Y. 2004);
Sokolski v. Trans Union Corp., 53 F. Supp. 2d 307, 313
(E.D.N.Y. 1999). Such considerations are surely not
exhaustive of the ways in which one might meaningfully
participate in the collection process, but we agree that
activities of such sorts may evidence genuine involvement in
the collection process and that our inspection of an entity’s
collection efforts must be holistic. The key is whether, in
consideration of all that an entity does in the collection
process, it genuinely contributes to an effort to collect
another’s debt, or instead does little more than act as a
mailing service for the creditor. See, e.g., Vincent, 736 F.3d
at 103 (“[T]he appropriate inquiry is whether the third party
. . . merely operat[es] as a conduit for a collection process that
the creditor controls.” (internal quotation marks omitted));
Hartley, 295 F.R.D. at 371 (flat-rater does “little more than
coordinate the mailing of letters and forward responses to the
creditor”); Peters v. AT&T Corp., 43 F. Supp. 2d 926, 929
(N.D. Ill. 1999) (“[C]ourts have focused on whether the
collection agency was hired only as a mailing service . . . .”);
see also S. Rep. No. 95-382 (1977) (“[T]he flat-rater is not in
the business of debt collection, but merely sells dunning
letters.”).
Although CCI could not negotiate, process, or seek to
compel repayments, it participated in the attempts to collect
16 ECHLIN V PEACEHEALTH
debts owed to PeaceHealth in a variety of other ways.
Undisputed evidence in the record shows that: (1) CCI
independently screened accounts for barriers to collection;
(2) CCI alone drafted and mailed the collection letters,
without input from PeaceHealth; (3) the letters invited
debtors to contact CCI by mail or phone and CCI trained its
personnel to handle such inquiries; (4) CCI in fact received
approximately 500 calls a week from debtors of its various
clients and received several hundred pieces of mail from
PeaceHealth debtors; (5) in their conversations with debtors,
CCI staff provided a variety of information about their debts
and how to repay them; (6) CCI maintained a website where
PeaceHealth debtors could access individualized information
about their debts and submit documents to CCI; and (7) CCI
sometimes received and forwarded to PeaceHealth payments
it received from debtors. Certainly, CCI could have been
more directly interested in the outcome of PeaceHealth’s
attempts to collect on patients’ debts. Nonetheless, CCI’s
assistance in facilitating those efforts went beyond acting
simply as a mailing house for PeaceHealth. We are
persuaded that CCI’s efforts were enough to have participated
meaningfully in the attempts to collect debts like Echlin’s.
C
Echlin also argues that the district court’s conclusion is
inconsistent with two out-of-circuit cases in which attorneys
who mailed collection notices on a creditor’s behalf were
deemed not to have participated meaningfully in the
collection process. We disagree.
ECHLIN V PEACEHEALTH 17
1
In Nielsen v. Dickerson, the Seventh Circuit considered
whether certain form collection letters falsely represented that
the letters came “from an attorney,” in violation of 15 U.S.C.
§ 1692e(3). 307 F.3d at 634–35. That question turned on
whether the attorney who composed and mailed the letters in
an “assembly-line fashion” was, “as a legal professional,”
actually “involved in [the] debt collection process in any
meaningful sense.” Id. at 635, 637 (emphasis added). The
Seventh Circuit thus structured its analysis around the special
requirements imposed on attorneys who purport to be
participating in the collection process:
[A] debt collection letter that is issued on an
attorney’s letterhead . . . conveys the notion
that the attorney has “directly controlled or
supervised the process through which the
letter was sent”—i.e., that he has assessed the
validity of the debt, is prepared to take legal
action to collect on that debt, and has . . .
decided that a letter should be sent to the
debtor conveying that message. . . .
“If a debt collector . . . wants to take
advantage of the special connotation of the
word ‘attorney’ in the minds of delinquent
consumer debtors[,] . . . the debt collector
should at least ensure that an attorney has
become professionally involved in the
debtor’s file. Any other result would sanction
the wholesale licensing of an attorney’s name
for commercial purposes, in derogation of
professional standards . . . .”
18 ECHLIN V PEACEHEALTH
Id. at 635 (quoting Avila v. Rubin, 84 F.3d 222, 229 (7th Cir.
1996)).
The court recounted the “ministerial” nature of the
attorney’s services in that case, id. at 635–38, and concluded
that “although an unsophisticated consumer would have
construed [the] letter to reflect an attorney’s professional
judgment that her debt was delinquent and ripe for legal
action, in fact [he] had made no such assessment.” Id. at 638
(citation omitted). Thus, “the attorney, qua attorney,” had
not contributed to the collection process “in any meaningful
sense,” and the letters could not fairly be said to have come
from him in such capacity. Id. at 639 (emphasis added).
The court in Nielsen only briefly addressed the attorney’s
potential liability as a flat-rater under § 1692j, stating that,
because he did not meaningfully participate in the collection
process in his professional capacity, he might “seem to be a
natural candidate for flat-rating liability pursuant to section
1692j.” Id. But the court ultimately did not decide whether
the attorney violated § 1692j, because any such liability
would have been redundant of his liability under § 1692e(3).
Id. at 640. Critically, the court did not discuss whatsoever
whether its analysis of the attorney’s § 1692j liability would
have differed from its prior attorney-specific analysis under
§ 1692e(3). In short, Nielsen says virtually nothing about the
sufficiency of CCI’s collection efforts in this case, where CCI
did not purport to be involved in the process as an attorney
and which does not involve any question of liability under
§ 1692e(3).
ECHLIN V PEACEHEALTH 19
2
In Vincent v. Money Store, the Second Circuit considered
whether a creditor that hired a law firm to mail debtcollection
notices could be held liable for violations of
§ 1692e as its own “debt collector” under the FDCPA’s falsename
exception,6 because the law firm was not meaningfully
involved in collection efforts. 736 F.3d at 91. Although
Vincent did not address § 1692e(3)’s prohibition against false
representations of communications “from an attorney,” the
Second Circuit recounted Nielsen in detail and explicitly
followed its analysis. See id. at 102–04. Ultimately, much as
in Nielsen, the Vincent court concluded that “a jury could
find” that collection letters mailed by the law firm “falsely
implied that [the firm] was attempting to collect [the
creditor’s] debts and would institute legal action against
debtors,” when in fact the firm “acted as a mere conduit for
a collection process [the creditor] controlled.” Id. at 104
(internal quotation marks omitted). The court purportedly did
not address whether attorneys should be held to a higher
standard for “meaningful participation,” id. at 104 n.17, but
its conclusion drew heavily on Nielsen’s attorney-specific
analysis and it reflected similar concerns regarding the unique
sort of participation that is implied by letters that indicate the
creditor has retained an attorney to collect its debts. See
generally id. at 102–04; see also id. at 114–16 (Livingston, J.,
concurring in part and dissenting in part) (“As the majority
notes, what is potentially deceptive about the letters . . . is
6 As noted above, the Second Circuit treats the § 1692a(6) false-name
exception as essentially the inverse of § 1692j, and it has held that when
a creditor uses the services of a flat-rater, the creditor itself can be held
liable for violations of § 1692e as the de facto “collector” of its own debts.
See supra n.5.
20 ECHLIN V PEACEHEALTH
their implication that Moss Codilis attorneys had been
retained as attorneys to collect the plaintiffs’ debts when in
reality [they had not]. . . . [C]ollecting or attempting to
collect a debt in a legal capacity is not the same as collecting
or attempting to collect a debt generally.” (internal quotation
marks omitted)).
Moreover, CCI appears to have participated to a greater
degree in collection efforts than the law firm in Vincent did.
There, the plaintiffs had presented evidence that the law firm
drafted the letters “jointly” with the creditor, directed debtors
to send nearly “all communication about this matter” to the
creditor itself, and after mailing the demand letters
“performed virtually no role in the actual debt collection
process” besides verifying the existence of a debt or the
identity of the creditor to those debtors who did call the firm
instead of the creditor. See id. at 93–95 & n.3, 104 (internal
quotation marks and alterations omitted). As explained
above, CCI was far more directly involved in the process of
attempting to collect debts for PeaceHealth.
D
In sum, Echlin has not pointed to any case in which a
company has been held liable for flat-rating where its services
include (among other things): screening referred debtors for
barriers to collection, independently composing and mailing
collection letters, inviting and responding to customer
questions on a variety of details about the collection process,
and maintaining a website that allows customers to access
individualized information about their debts and to submit
electronic files to the company. We agree with the district
court that these activities are enough to show that CCI
ECHLIN V PEACEHEALTH 21
meaningfully participated in the attempts to collect Echlin’s
debts.
III
Echlin also contends that the district court erred in
striking her claim that CCI violated the FDCPA’s prohibition
against “threat[ening] to take any action that cannot legally be
taken or that is not intended to be taken.” 15 U.S.C.
§ 1692e(5). She argues both that her original complaint gave
CCI adequate notice of its need to defend a against such a
claim,7 and that, even if it didn’t, she should have been given
leave to amend the complaint to add an express § 1692e(5)
claim.
A
“Federal Rule of Civil Procedure 8(a)(2) requires that the
allegations in the complaint give the defendant fair notice of
what the plaintiff’s claim is and the grounds upon which it
rests.” Pickern v. Pier 1 Imports (U.S.), Inc., 457 F.3d 963,
968 (9th Cir. 2006) (internal quotation marks omitted). As
the district court recognized, Echlin’s complaint focused
narrowly on her flat-rating allegations. The complaint
alleged that CCI “was not acting as a debt collector . . . [but
instead] was acting as a flat-rater.” It elaborated in detail,
alleging that PeaceHealth instructed CCI to send the letters to
create the false impression that Echlin’s debt had been “sent
to collections” and that PeaceHealth “employed Defendant
CCI’s letterhead and identity as a collection agency in an
attempt to deceive Plaintiff” about CCI’s role in the process.
7 Echlin appears to raise this claim against only CCI and not
PeaceHealth.
22 ECHLIN V PEACEHEALTH
The complaint cited § 1692j three times and alleged
specifically that the letters “created a false or misleading
belief that Defendant CCI was meaningfully involved in the
collection of a debt prior to the debt actually being sent to
collections in violation of 15 U.S.C. §§ 1692e and 1692j.”
By contrast, the complaint never cited § 1692e(5), nor did
it mention the FDCPA’s prohibition against threatening to
take an action that is not intended or legally authorized. The
complaint’s only references to § 1692e at all were made in
direct connection with Echlin’s § 1692j flat-rating
allegations; indeed, as explained above, Echlin has
throughout argued general violations of § 1692e that mirror
her § 1692j allegations. See supra n.5. Although the
complaint alleged that PeaceHealth was acting as a “debt
collector” under the FDCPA—a necessary requirement for
any claim under § 1692e, including of course a claim under
§ 1692e(5)—it did not allege that CCI was. In fact, the
complaint expressly disavowed such a claim, alleging that
CCI “was not acting as a debt collector when it sent the
Letters.” This makes sense, as the complaint’s sole theory of
liability was that CCI was merely a flat-rater, not a true debt
collector. But it is manifestly contrary to Echlin’s suggestion
that her complaint claimed that CCI’s conduct also violated
§ 1692e(5).
The closest the complaint comes to suggesting anything
resembling Echlin’s § 1692e(5) argument is in its alleging
that CCI “was not authorized to take legal action regarding
the alleged debts.” Critically, however, the complaint does
not allege that CCI ever threatened to take legal action despite
its lack of authority to do so. In other words, the complaint
does not allege the minimum facts needed to support a
§ 1692e(5) claim against CCI, even if one were intended.
ECHLIN V PEACEHEALTH 23
This, again, is not surprising, because Echlin’s allegation that
CCI lacked authority to take legal action has consistently
been cited to support her contention that CCI was merely a
flat-rater.
In sum, the district court did not err in concluding that
Echlin’s complaint and its focus on flat-rating failed to give
CCI fair notice of her later-argued § 1692e(5) claim. Echlin’s
attempt to add such a claim at the summary judgment stage
is impermissible. See Navajo Nation v. U.S. Forest Serv.,
535 F.3d 1058, 1080 (9th Cir. 2008); Wasco Prods., Inc. v.
Southwall Techs., Inc., 435 F.3d 989, 992 (9th Cir. 2006).
B
Echlin further argues that, even if her original complaint
did not raise a claim under § 1692e(5), she should have been
granted leave to amend her complaint to add one. Although
Echlin never filed a formal motion for leave to amend, the
district court concluded that amendment would be futile,
because, at that point, any such claim would have been barred
by the FDCPA’s one-year statute of limitations. See
15 U.S.C. § 1692k(d). Echlin concedes that the statute of
limitations would generally bar a new § 1692e(5) claim, but
she contends that the amended claim should “relate back” to
the date of her original complaint. Echlin failed to make such
an argument to the district court, but her argument fails in any
event.
Under Federal Rule of Civil Procedure 15(c), an
amendment to a complaint may “relate[] back” to the date of
the original complaint where it “asserts a claim or defense
that arose out of the conduct, transaction, or occurrence set
out—or attempted to be set out—in the original pleading.”
24 ECHLIN V PEACEHEALTH
Fed. R. Civ. P. 15(c)(1)(B). The claims must “share a
common core of operative facts such that the plaintiff will
rely on the same evidence to prove each claim.” Williams v.
Boeing Co., 517 F.3d 1120, 1133 (9th Cir. 2008) (internal
quotation marks omitted); see also id. at 1133 n.9 (relation
back standard “is meant to ensure that the original pleading
provided adequate notice of the claims raised in the amended
pleading”). Thus, an amendment will not relate back where
the amended complaint “had to include additional facts to
support the [new] claim.” Id. at 1133.
Although Echlin’s § 1692e(5) claim arises from the same
general transaction as her flat-rating claims, it would not rely
on all the same facts and evidence. As discussed above,
Echlin’s complaint failed to allege at least two facts critical
to support a § 1692e(5) claim: (1) that CCI is a debt collector
under the Act and (2) that CCI threatened to take any action
against her that it had no authority or intention to take. As we
have noted, the first point is in fact directly contradictory to
the allegations of Echlin’s complaint, and thus would
naturally turn on questions not presented by those original
allegations. And the second point would likewise turn on
different evidence than Echlin’s flat-rating claims, as it
focuses on the specific representations made in the letters
rather than the nature of CCI’s role in the collection process.8
To find in Echlin’s favor, the trier of fact would be called to
interpret what, if anything, CCI’s letters threaten to do and
8 For example, at the summary judgment stage, Echlin sought to
illustrate CCI’s supposedly empty threats to take further action
specifically by reference to representations made in the second and “final”
letter CCI sent her on April 19, 2013, after she failed to respond to CCI’s
first collection letter—yet that second letter is not mentioned at all in
Echlin’s complaint.
ECHLIN V PEACEHEALTH 25
whether CCI planned to follow through on those
threats—questions that simply are not presented by Echlin’s
flat-rating claims. CCI might well have called different
witnesses or pursued a different litigation strategy to defend
against such issues. Indeed, CCI contends that it waived
certain defenses arguably available to it specifically because
it understood Echlin only to be raising flat-rating claims in
this lawsuit.
In short, the district court did not err in concluding that
CCI would have been “substantially prejudiced by
undertaking an entirely new course of defense based on these
[§ 1692e(5)] allegations” so far into litigation. Any
amendment to add Echlin’s materially different § 1692e(5)
claim would not relate back to the date of Echlin’s original
complaint, and would therefore be time-barred.
IV
Finally, Echlin argues that CCI also violated § 1692e(10),
because its letters deceptively included contact information
for both CCI and PeaceHealth and “fail[ed] to clarify whether
she should communicate with and pay CCI or PeaceHealth.”
Echlin failed to raise this argument at any point prior to this
appeal. Such a claim is nowhere to be found in Echlin’s
complaint, and she did not even bother to argue it when
opposing the motions for summary judgment. The issue is
therefore waived. See BankAmerica Pension Plan v.
McMath, 206 F.3d 821, 825 (9th Cir. 2000).

Outcome: The judgment of the district court is AFFIRMED.

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