FDCPA Case Decision: Riccio v. Sentry Credit, Inc. — Disputes must be in writing?


This recent case from the Third Circuit Court of Appeals is very important to understanding the FDCPA (Fair Debt Collection Practices Act).

The full citation to the case is:  Riccio v Sentry Credit, Inc. (3rd Cir. March 30, 2020).  And the Google Scholar link is here:  https://scholar.google.com/scholar_case?case=18158055043397526690&q=%22fair+debt+collection+practices+act%22&hl=en&scisbd=2&as_sdt=3,44

(If you are not familiar with Google Scholar — check out this video — Google Scholar is a fantastic free resource).

I’ll copy the text of the opinion and then put in some commentary in bold.  Thanks for reading!

SMITH, Chief Judge.

This case presents a question of statutory interpretation: does 15 U.S.C. § 1692g(a)(3) allow debtors to orally dispute a debt’s validity?

This has been an area of disagreement among the courts.

It also presents a question of stare decisis: should our en banc Court resolve a circuit conflict by overturning a three-decades-old panel decision which has been eroded by intervening Supreme Court authority?

Very unusual for a court to undo its own decisions.  En Banc means the entire court considers this, rather than a 3 member panel as most court of appeals decisions are made.

Because we answer both questions affirmatively, we will overrule Graziano v. Harrison‘s contrary interpretation of § 1692g(a)(3) and affirm.



The statutory interpretation question arises from language which appears in the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (FDCPA). The FDCPA protects against abusive debt collection practices by imposing restrictions and obligations on third-party debt collectors. See §§ 1692b-1692j.

This case turns on the validation notice and how a consumer is allowed to dispute a debt.

This case concerns one of those requirements: that debt collectors send debtors a letter notifying them of their right to dispute the debt. See § 1692g. Section 1692g(a) specifies five things the letter, often called a “validation notice,” must include:

(1) the amount of the debt;

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

(3) a statement that unless the consumer, within thirty 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 the 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.

The question presented is whether the letter must require all disputes to be in writing, or whether § 1692g(a)(3) permits oral disputes.

The court will point out that different courts have reached different conclusions but almost all the courts outside the third circuit hold that a consumer can make an oral dispute.  Note this is NOT the same thing as a validation/verification request — disputes and validation/verification requests are different although they can be in the same letter.  A validation/verification request MUST be in writing.  This case concerns the “dispute” part only.

Before answering that question, it is instructive to examine other protections the FDCPA provides when debts are disputed. For instance, § 1692g(b) demands that:

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

In addition, debt collectors are prohibited from reporting disputed debts to credit agencies without noting the fact of a dispute. See § 1692e(8) (prohibiting collectors from “[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed”).

This is critical as many collectors, after a dispute, will NOT update your credit report to show the account is disputed.  If they update the reporting at all, it MUST show disputed.

Finally, collectors seeking payments on multiple debts owed by the same debtor cannot apply a payment to any disputed debts. See § 1692h (“If any consumer owes multiple debts and makes any single payment to any debt collector with respect to such debts, such debt collector may not apply such payment to any debt which is disputed by the consumer and, where applicable, shall apply such payment in accordance with the consumer’s directions.”).


We first considered the import of § 1692g(a)(3) in Graziano. See 950 F.2d 107 (3d Cir. 1991). There, a three-judge panel expressed “the view that, given the entire structure of section 1692g, subsection (a)(3) must be read to require that a dispute, to be effective, must be in writing”:

Adopting [a contrary] reading of the statute would thus create a situation in which, upon the debtor’s non-written dispute, the debt collector would be without any statutory ground for assuming that the debt was valid, but nevertheless would not be required to verify the debt or to advise the debtor of the identity of the original creditor and would be permitted to continue debt collection efforts. We see no reason to attribute to Congress an intent to create so incoherent a system. We also note that there are strong reasons to prefer that a dispute of a debt collection be in writing: a writing creates a lasting record of the fact that the debt has been disputed, and thus avoids a source of potential conflicts.

Id. at 112; accord Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013) (“In Graziano v. Harrison, we specifically concluded that `subsection (a)(3), like subsections (a)(4) and (a)(5), contemplates that any dispute, to be effective, must be in writing.'” (citation omitted) (quoting Graziano, 950 F.3d at 112)).

So this older case — Graziano — said that any type of dispute must be in writing.  No oral disputes.  This affects consumers in the third circuit as they cannot do verbal disputes.  AND it impacts debt collectors because if they don’t make it clear that only written disputes are valid, then they violate the FDCPA.


In the matter now before us, Maureen Riccio fell behind on payments to M-Shell Consumer Oils. Sentry Credit bought the debt and sought to collect on it. So it sent Riccio a letter containing the following notification:

Compl. Ex. A.

The text of letter is not showing up here but basically it did NOT say the dispute must be in writing.  So here is the oddity of this statute.  The consumer is arguing all disputes MUST be in writing.  The collector is arguing the opposite.  Sometimes parties take unusual positions because they are trying to win their case.  Normally we would expect consumers arguing for more flexibility — dispute in writing or verbally.  But here, the consumer’s case rests on the strange third circuit law that disputes can only work if in writing.

Riccio sued,[1] alleging the letter violated § 1692g(a)(3) by providing a debtor with multiple options for contacting Sentry Credit rather than explicitly requiring any dispute be in writing. App. 53-54. Sentry Credit agreed that it had to require Riccio to dispute the debt in writing under

Graziano, but the company viewed its letter as complying with that requirement. It therefore moved for judgment on the pleadings, and the District Court granted the motion. See 2018 WL 638748, at *4-6 (D.N.J. Jan. 31, 2018).

This means the case was thrown out of court — it was dismissed.

Riccio timely appealed. The District Court exercised jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291 and review statutory interpretation questions de novo. See United States v. Hodge, 948 F.3d 160, 162 (3d Cir. 2020).


As noted, a panel of this Court previously concluded § 1692g(a)(3) requires that “any dispute, to be effective, must be in writing.” Graziano, 950 F.2d at 112. Yet reading the statutory text with fresh eyes—and more importantly, with the past three decades of Supreme Court statutory-interpretation caselaw—we think § 1692g(a)(3) permits oral disputes.

This is important — it shows that courts will sometimes admit they made a mistake and change the law to get it right.


We begin by looking at § 1692g(a)(3) itself. That provision refers only to “disputes,” without specifying oral or written. Used generally, the word fairly encompasses both forms of communication. See, e.g., Dispute, Oxford English Dictionary (2d ed. 1989) (“To discuss, debate, or argue (a question); . . . To argue against, contest, controvert; To call in question or contest the validity or accuracy of a statement, etc., or the existence of a thing.”).

The starting point is always the words themselves.  And often courts look to dictionaries to see what the ordinary plain meaning of the word is and then see if that fits the law.

We must read § 1692g as a whole. Subsection (a)(3) merely calls for “the consumer” to “dispute[] the validity of the debt” in order to rebut the statutory presumption of validity. But (a)(4) requires “the consumer [to] notif[y] the debt collector in writing” before forcing the collector to mail documentation verifying the debt. (emphasis added). And (a)(5) similarly demands that the consumer make a “written request within the thirty-day period” to compel the collector to “provide the consumer with the name and address of the original creditor, if different from the current creditor.” (emphasis added). Subsection (b) then echoes (a)(4) and (5), obliging collectors to “cease collection . . . until . . . obtain[ing] verification” if the debtor “notifie[d] the debt collector” of a dispute or requested the creditor’s identity “in writing.” (emphasis added). That intra-section variation strongly signals that § 1692g permits oral disputes.

This whole area is called “statutory construction” and it is a set of rules to figure out how to interpret the meaning of a statute.  Here is another rule:

“We refrain from concluding here that the differing language in the [various] subsections has the same meaning in each.” Russello v. United States, 464 U.S. 16, 23 (1983).

We must also consider the entirety of the FDCPA. Like § 1692g(a)(3)—but unlike (a)(4), (a)(5), and (b)— §§ 1692e(8) and 1692h also discuss “dispute[s]” without specifying a method of communication.

When Congress shows it knows how to write something, then it is hard to assume Congress just forgot in a different section of the same law.

That inter-section variation amplifies the variation within § 1692g and, in our view, refutes Riccio’s suggestion that Congress inadvertently omitted a writing requirement from § 1692g(a)(3). “[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello, 464 U.S. at 23 (alteration in original) (quoting United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972)).

Finally the court looks at the surplusage rule — don’t make the words redundant.  Assume they have meaning.

Finally, we consider one of the most venerable of our interpretive canons: the rule against surplusage. See Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995) (“[T]he Court will avoid a reading which renders some words altogether redundant.”); see also Marbury v. Madison, 5 U.S. (1 Cranch) 137, 174 (1803) (using this canon to interpret U.S. Const. art. III, § 2, cl. 2).

Now the court will show how a verbal dispute works and a written dispute works.  Written dispute sent in time under 1692g stops collection.  A verbal dispute does not but it does have an impact on credit reporting (1692e8).

Collectively, the text of § 1692g(a)(3), (a)(4), and (b) signifies that if a debtor makes the effort to dispute the debt in writing, the collector must immediately stop collecting, verify the debt, and respond. Yet if the debtor merely disputes the debt orally, the collector can continue attempts to collect the debt. It will, though, eventually have to prove the debt’s validity.

Injecting a writing requirement into (a)(3) effectively strikes that provision from the statute. It is a truism that if a debt isn’t presumed valid, the debt collector must eventually verify it. Subsection (a)(3) merely restates that point: if the debtor disputes the debt, the collector must verify it at some point down the road. But (a)(4) and (b) demand that if the debtor disputes the debt in writing, the collector must prove its validity immediately. So if every dispute must be conveyed in writing, collectors must prove every debt immediately—no collector can ever count on its future ability to prove a debt. Put differently, inserting a writing requirement into (a)(3) means that every dispute triggers (a)(4) and (b). That simply can’t be right. If every dispute triggers (a)(4) and (b), then (a)(3) has no independent effect.

* * *

The upshot: § 1692g(a)(3)’s plain meaning permits a debtor to dispute a debt orally. And when a “`statute’s language is plain, the sole function of the courts’—at least where the disposition required by the text is not absurd— `is to enforce it according to its terms.'” Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000) (quoting United States v. Ron Pair Enters., 489 U.S. 235, 241 (1989)).

Now the consumer is trying desparately to argue against this result — the consumer here wants the court to keep the law that disputes can only be in writing.  Notice the “that dog won’t hunt” statement from the court — I thought that was a southern expression.  🙂

Riccio tries using this absurd-result exception to shoehorn a writing requirement into § 1692g(a)(3).[2] But that dog won’t hunt. “An absurd interpretation is one that `defies rationality or renders the statute nonsensical and superfluous.'” Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152 (3d Cir. 2018) (quoting United States v. Moreno, 727 F.3d 255, 259 (3d Cir. 2013)). As long as Congress could have any conceivable justification for a result—even if the result carries negative consequences—that result cannot be absurd. See United States v. Fontaine, 697 F.3d 221, 228 (3d Cir. 2012) (“[S]tandard interpretive doctrine . . . defines an `absurd result’ as an outcome so contrary to perceived social values that Congress could not have `intended’ it.” (quoting John F. Manning, The Absurdity Doctrine, 116 Harv. L. Rev. 2387, 2390 (2003))); Hanif v. Attorney Gen., 694 F.3d 479, 487 (3d Cir. 2012)see also In re Visteon Corp., 612 F.3d 210, 234 (3d Cir. 2010) (“Virtually all laws would be absurd if judged by whether they accomplish a perfect solution to an underlying legislative concern.”).

Reading § 1692g(a)(3) to permit oral disputes falls far short of the high bar this Court has set.

Putting aside the interest of this consumer, allowing verbal disputes makes a lot of sense in a consumer protection statute.

In fact, allowing oral disputes makes sense: it provides debtors multiple methods to dispute debts while assigning various rights depending on the method.[3] An oral dispute can still defeat the presumption of validity, still prevent collectors from reporting the debt without noting the dispute, and still preclude debt collectors holding multiple debts of the same debtor from applying a payment to the disputed debt. It just doesn’t force the debt collector to immediately stop, verify, and respond in the way the FDCPA requires if a dispute is in writing. That’s hardly absurd. If nothing else, it is easier to prove written disputes and therefore easier to enforce the additional protections that attach.[4]

The doctrine of separation of powers comes into play — the courts should not mess with the laws of Congress if there is any way not to….

Lest any doubt remains, Lamie v. United States Trustee should settle the matter. There, the Supreme Court refused to “read an absent word into [a] statute” despite “an apparent legislative drafting error” that rendered the statute “awkward, and even ungrammatical.” 540 U.S. 526, 530-38 (2004). “With a plain, nonabsurd meaning in view, we need not proceed in this way,” the Court said, noting their “longstanding” “unwillingness to soften the import of Congress’ chosen words even if we believe the words lead to a harsh outcome.” Id. at 538.

So too here. Even if we thought Congress inadvertently omitted a writing requirement from § 1692g(a)(3), and even if we thought permitting oral disputes precipitated an incoherent system, we must still recognize the validity of oral disputes based on § 1692g’s plain meaning. “If Congress enacted into law something different from what it intended, then it should amend the statute . . . . `It is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think . . . is the preferred result.'” Id. at 542 (second omission in original) (quoting United States v. Granderson, 511 U.S. 39, 68 (1994) (Kennedy, J., concurring in the judgment)).


Here are the other courts — basically everyone says the law means what it says — any type of dispute (verbal included) works.

Other courts have reached the same conclusion. The Second, Fourth, and Ninth Circuits reject a writing requirement, openly splitting with Graziano. See Clark v. Absolute Collection Serv., Inc., 741 F.3d 487, 490-91 (4th Cir. 2014) (per curiam)Hooks v. Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282, 285-86 (2d Cir. 2013)Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078, 1080-81 (9th Cir. 2005). And without noting the split, the First, Fifth, Sixth, and Seventh Circuits have taken the same position. See Macy v. GC Servs. Ltd., 897 F.3d 747, 757-58 (6th Cir. 2018)Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 347 n.6 (7th Cir. 2018)Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246, 249-50 (5th Cir. 2017)Brady v. Credit Recovery Co., 160 F.3d 64, 66-67 (1st Cir. 1998).


In sum, we no longer think § 1692g(a)(3) requires written disputes. Simply put, “Congress did not write the statute that way.” United States v. Naftalin, 441 U.S. 768, 773 (1979). Subsections (a)(4), (a)(5), and (b) command a written dispute; (a)(3) does not. “We would not presume to ascribe this difference to a simple mistake in draftsmanship.” Russello, 464 U.S. at 23.


So we know what the law is.  But what about the idea that the law is supposed to provide certainty.  Cases can be relied upon.  This doctrine is called “stare decisis” and the court addresses this next.  After all, the consumer relied upon the long standing law in the third circuit so why should they lose now?

The foregoing details our reasoning, and our disagreement with Graziano. Yet we must consider whether stare decisis justifies our upholding that precedent. “Stare decisis—in English, the idea that today’s Court should stand by yesterday’s decisions—is `a foundation stone of the rule of law.'” Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401, 2409 (2015) (quoting Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 798 (2014)). To be sure, stare decisis “is not an inexorable command,” but it is critical to “promote[] the evenhanded, predictable, and consistent development of legal principles, foster[] reliance on judicial decisions, and contribute[] to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827 (1991). In fact, sometimes it “means sticking to some wrong decisions.” Kimble, 135 S. Ct. at 2409. After all, “it is usually `more important that the applicable rule of law be settled than that it be settled right.'” Id. (quoting Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 406 (1932) (Brandeis, J., dissenting)). That’s especially true in statutory interpretation cases like this one, because Congress can correct unintended interpretations. See id. at 2409-10.

Courts often have to find more than just that they were wrong.  This is discussed next…

Before overruling its own precedent, the Supreme Court looks for “`special justification[s]’ [] over and above the belief `that the precedent was wrongly decided.'” Kimble, 135 S. Ct. at 2409 (quoting Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 266 (2014)). Those include “the quality of [the prior case]’s reasoning, the workability of the rule it established, its consistency with other related decisions, developments since the decision was handed down, and reliance on the decision.” Janus v. AFSCME, 138 S. Ct. 2448, 2478-79 (2018). Though we, as a lower court, “play a different role in the federal system,” we join virtually every other Circuit in weighing those same considerations before overturning our own caselaw. Critical Mass Energy Project v. NRC, 975 F.2d 871, 876 (D.C. Cir. 1992) (en banc)see also United States v. Sykes, 598 F.3d 334, 338 (7th Cir. 2010), aff’d, 564 U.S. 1 (2011), overruled on other grounds by Johnson v. United States, 135 S. Ct. 2551 (2015)Shi Liang Lin v. U.S. Dep’t of Justice, 494 F.3d 296, 310 (2d Cir. 2007) (en banc)United States v. Heredia, 483 F.3d 913, 918-19 (9th Cir. 2007) (en banc)Glazner v. Glazner, 347 F.3d 1212, 1216 (11th Cir. 2003) (en banc)Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 575 (Fed. Cir. 2000) (en banc)vacated on other grounds, 535 U.S. 722 (2002)Stewart v. Dutra Constr. Co., 230 F.3d 461, 467 (1st Cir. 2000), rev’d on other grounds, 543 U.S. 481 (2005)Coats v. Penrod Drilling Corp., 61 F.3d 1113, 1137-38 (5th Cir. 1995) (en banc)McKinney v. Pate, 20 F.3d 1550, 1565 n.21 (11th Cir. 1994) (en banc).

Now the court considers some unique aspects to a court of appeals — was the decision by a 3 judge panel or by the whole court?

We also consider three factors unique to courts of appeals. First, prior en banc decisions carry more stare decisis weight than prior panel decisions. See United States v. Games-Perez, 695 F.3d 1104, 1124 (10th Cir. 2012) (Gorsuch, J., dissental) (“[I]t is surely uncontroversial to suggest that the point of the en banc process, the very reason for its existence, is to correct grave errors in panel precedents when they become apparent, even if the panel precedents in question happen to be old or involve questions of statutory or regulatory interpretation.”); Igartua v. United States, 654 F.3d 99, 100 (1st Cir. 2011) (statement of Lynch, C.J., and Boudin & Howard, JJ.) (declining “to reopen settled issues which have already been given en banc treatment”); McKinney, 20 F.3d at 1565 n.21 (“It must be recalled that this is the first time this court sitting en banc has addressed this issue; thus, the implications of stare decisis are less weighty than if we were overturning a precedent established by the court en banc.”). See generally Letter from Justice Sandra Day O’Connor to Ret. Justice Byron R. White (June 23, 1998), published in Review of the Report by the Commission on Structural Alternatives for the Federal Courts of Appeals Regarding the Ninth Circuit and the Ninth Circuit Reorganization Act: Hearing on S. 253 Before the Subcomm. on Admin. Oversight & the Courts of the S. Comm. on the Judiciary, 106th Cong. 71 (1999) [hereinafter Ninth Circuit Review] (“It is important to the federal system as a whole that the Courts of Appeals utilize en banc review to correct panel errors within the circuit that are likely to otherwise come before the Supreme Court.”); Letter from Justice Antonin Scalia to Ret. Justice Byron R. White (Aug. 21, 1998), published in Ninth Circuit Review 72 (“[T]he function of en banc hearings . .. is not only to eliminate intra-circuit conflicts, but also to correct and deter panel opinions that are pretty clearly wrong. . . . The disproportionate segment of [the Supreme Court’s] discretionary docket that is consistently devoted to reviewing [a court of appeals’s] judgments, and to reversing them by lop-sided margins, suggests that this error-reduction function is not being performed effectively.”).

How about what other courts say and believe?

Second, “[w]hile we generally `decide cases before us based on our own examination of the issue, not on the views of other jurisdictions,’ the[] more recent [contrary] decisions [from other circuits] suggest that we should `consider whether the reasoning applied by our colleagues elsewhere is persuasive.'” Bastardo-Vale v. Attorney Gen., 934 F.3d 255, 267 (3d Cir. 2019) (en banc) (quoting In re Grossman’s Inc., 607 F.3d 114, 121 (3d Cir. 2010) (en banc)); see also United States v. Corner, 598 F.3d 411, 414 (7th Cir. 2010) (en banc) (“Although . . . it is rarely appropriate to overrule circuit precedent just to move from one side of a [circuit] conflict to another, reconsideration is more appropriate when [we] can eliminate the conflict by overruling a decision that lacks support elsewhere.”); cf. Wagner v. PennWest Farm Credit, ACA, 109 F.3d 909, 912 (3d Cir. 1997) (“In light of such an array of [unanimous] precedent [from other courts of appeals], we would require a compelling basis to hold otherwise before effecting a circuit split.”); Butler Cty. Mem’l Hosp. v. Heckler, 780 F.2d 352, 357 (3d Cir. 1985) (“[T]his Court should be reluctant to contradict the unanimous position of other circuits.”).

Finally, there can be other cases that imply the original decision is just not sound anymore.

Third, “on rare occasions a circuit precedent, though not directly overruled or superseded, nonetheless might crumble” if “case law postdating `the original decision, although not directly controlling, nevertheless offers a sound reason for believing that the former panel, in light of fresh developments, would change its collective mind.'” Stewart, 230 F.3d at 467 (quoting Williams v. Ashland Eng’g Co., 45 F.3d 588, 592 (1st Cir. 1995)).

All three factors support overturning Graziano. Given Lamie and other recent Supreme Court decisions, we believe the panel that decided Graziano would decide it differently today. And what’s more, Graziano was only a panel decision; our en banc Court has never expressed a view on the issue presented.

Now all courts are united in this area of the law…

By expressing our view today, we put an end to a circuit split and restore national uniformity to the meaning of § 1692g.

Traditional stare decisis considerations point in the same direction. For starters, district courts applying Graziano have split over whether identical language violates its rule. See Cadillo v. Stoneleigh Recovery Assocs., LLC, No. 17-7472, 2019 WL 1091391, at *4 (D.N.J. Mar. 8, 2019) (collecting cases), appeal docketed, 19-2811 (3d Cir. Aug. 8, 2019).

Additionally, “the growth of judicial doctrine” has undermined Graziano‘s reasoning. Patterson v. McClean Credit Union, 491 U.S. 164, 173 (1989), superseded on other grounds by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, as recognized in Jones v. R.R. Donnelly & Sons Co., 541 U.S. 369, 383 (2004). Recall how Graziano framed its own conclusion: “subsection (a)(3) . . . contemplates that any dispute, to be effective, must be in writing.” 950 F.2d at 112 (emphasis added). That is a curious verb choice, since it suggests the panel thought § 1692g(a)(3) meant something other than what it says. See, e.g., Contemplate, Oxford English Dictionary (2d ed. 1989) (“To have in view, look for, expect, take into account as a contingency to be provided for. To have in view as a purpose; to intend, purpose.”).

But that is not how we read statutes today. In the years before Graziano, the Supreme Court engaged in statutory interpretation with statements like, “[a]bsent a clearly expressed legislative intention to the contrary, th[e statutory] language must ordinarily be regarded as conclusive.” Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980) (emphasis added). In the years since Graziano, the Court has instructed us “that [the] legislature says . . . what it means and means . . . what it says.” Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1725 (2017) (alteration and omissions in original) (quoting Dodd v. United States, 545 U.S. 353, 357 (2005)). In other words, “[a]s Justice Kagan recently stated, `we’re all textualists now.'” Brett M. Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2118 (2016) (reviewing Robert A. Katzmann, Judging Statutes (2014)) (quoting Justice Elena Kagan, The Scalia Lecture: A Dialogue with Justice Kagan on the Reading of Statutes at 8:28 (Nov. 17, 2015), http://perma.cc/BCF-FEFR). We decline to breathe new life into Graziano‘s atextual interpretation of § 1692g(a)(3), an interpretation that has already made us the “legal last-man-standing” among the courts of appeals. Kimble, 135 S. Ct. at 2411.

Moreover, any legitimate reliance interests seem minimal.

The court points out this will actually help debt collectors as they will have a uniform standard instead of having to send different letters based on where the consumer lives.

Overturning Graziano merely requires debt collectors to prospectively tweak their collection notice template. If anything, since debt collectors may operate nationwide, overturning Graziano should make their job easier by allowing them to use the same form no matter where a debtor resides. By contrast, resuscitating Graziano would mean collectors must use one notice in Pennsylvania, New Jersey, Delaware, and the Virgin Islands, but another everywhere else. And overturning Graziano helps debtors too, since the case’s atextual rule requires more than the statutory text mandates for them to dispute a debt’s validity. See supra note 3 and accompanying text.

* * *

By today’s standards, Graziano‘s “reasoning was clearly wrong”; changes in the way we interpret statutes “have unmoored the case from its doctrinal anchors.” Morrow v. Balaski, 719 F.3d 160, 180 (3d Cir. 2013) (Smith, J., concurring). Both traditional stare decisis principles and considerations unique to courts of appeals convince us that Graziano should be, and now is, overruled.


The consumer wants the ruling to be prospective only — applying only to future cases and not her case.  The court rejects this.

Perhaps anticipating the result we announce today, Riccio asks us to curb our holding’s retroactive application so that Graziano still governs her claim. Her only support for that argument is New Jersey precedent allowing state-court judges to limit a holding’s retroactive application “when `considerations of fairness and justice, related to reasonable surprise and prejudice to those affected’ counsel [them] to do so.” Malinowski v. Jacobs, 915 A.2d 513, 517 (N.J. 2007) (quoting N.J. Election Law Enf’t Comm’n v. Citizens to Make Mayor-Council Gov’t Work, 526 A.2d 1069, 1073 (N.J. 1987)).

Yet federal courts follow a different rule. Our holding today “is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule.” Harper v. Va. Dep’t of Taxation, 509 U.S. 86, 97 (1993). “[W]e can scarcely permit `the substantive law [to] shift and spring’ according to `the particular equities of [individual parties’] claims’ of actual reliance on an old rule and of harm from a retroactive application of the new rule.” Id. (alterations in original) (quoting James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 543 (1991) (opinion of Souter, J.)). We will, therefore, apply to this case our new rule that debt collectors need not require debtors to dispute the validity of their debt in writing.[5]


Our new rule dooms Riccio’s claim. As we and several other Circuits have held, debt collection notices must intelligibly convey the § 1692g(a) requirements. See Wilson v. Quadramed Corp., 225 F.3d 350, 354-55 (3d Cir. 2000) (collecting cases). Put another way, a hypothetical “least sophisticated debtor” should be able to read the notice and reasonably discern her rights. Id.; cf. United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 136 (4th Cir. 1996) (noting the least sophisticated debtor standard “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”).[6]

Sentry Credit’s collection notice easily clears that bar. Its plainspoken language reproduces § 1692g(a)(3)-(5) nearly word-for-word, alerting the least sophisticated debtor of her rights as effectively as does the statute itself. A collection notice can never mislead the least sophisticated debtor by relying on the language Congress chose. And since that’s all this notice did, Sentry Credit did not violate § 1692g.


In short, we conclude that debt collection notices sent under § 1692g need not require that disputes be expressed in writing. In doing so, we overrule Graziano‘s contrary holding. Because Sentry Credit’s notice perfectly tracked § 1692g’s text, we will affirm the judgment of the District Court.

[1] The FDCPA authorizes private actions and imposes strict liability for violations, with statutory damages up to $1000 and potential fee-shifting. See § 1692k.

[2] Riccio also uses United States v. American Trucking Associations, 310 U.S. 534, 543 (1940), to argue she need not show that permitting oral disputes would be absurd, just that it would be unreasonable. Simply put, that misrepresents the current state of the law. To depart from a statute’s plain meaning today, the text must dictate a result so unreasonable that it amounts to an absurdity. See Tenn. Valley Auth. v. Hill, 437 U.S. 153, 187 n.33 (1978)see also MORI Assocs., Inc. v. United States, 102 Fed. Cl. 503, 537-39 (2011) (detailing American Trucking Associations‘s practical abrogation).

[3] On this point, it bears noting that purposively reading the FDCPA underscores our textual conclusion. At bottom, expanding the ways a debtor can dispute a debt’s validity makes it easier for debtors to invoke its protections. So demanding written disputes not only flouts the FDCPA’s text—it also hoodwinks the Act’s purpose.

[4] Relatedly, at oral argument, Riccio’s counsel argued that permitting oral disputes would spawn conundrums over the “magic words” that distinguish a formal dispute from informal grumbling. Oral Argument at 3:16, 4:57 (Feb. 19, 2020), https://www2.ca3.uscourts.gov/oralargument/audio/18-1463Ricciov.%20SentryCreditInc.mp3; see also id. at 6:05, 50:31. We think district courts are more than capable of that linedrawing. In fact, they already do it when reviewing a debtor’s written communication.

[5] We do not suggest that debt collectors who sent Graziano-compliant letters before today will be on the hook for failing to foresee our change in the law. Just as collectors who act “in good faith in conformity with any [agency] advisory opinion” cannot be liable if that “opinion is amended, rescinded, or” judicially invalidated, § 1692k(e), collectors should not be penalized for good-faith compliance with then-governing caselaw. To that end, we note district courts can withhold damages for unintentional errors, § 1692k(b), award no damages for trivial violations, § 1692k(a)(1), and even award attorney’s fees to the collector if the debtor’s suit “was brought in bad faith and for the purpose of harassment,” § 1692k(a)(3). See generally Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 597-99 (2010). We have confidence in district courts to exercise that discretion appropriately.

[6] Although Judge Matey reaches the same conclusion as the Court, it is his view that the atextual “least sophisticated debtor” test announced in Graziano warrants reexamination. See Jensen v. Pressler & Pressler, 791 F.3d 413, 418 (3d Cir. 2015) (noting that the “least sophisticated debtor” requirement “appears nowhere in the text of the statute”). In his view, in an appropriate case, we should revisit whether that standard comports with the ordinary meaning of the FDCPA.

I hope you enjoyed this decision — I’ll do a video about this soon and the video will go at the front of this article.  If you have any comments or want to get in touch with us, please fill out our contact form here thanks!

John Watts

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