On Friday, March 24, 2017 a federal Judge in New Jersey dismissed a putative Fair Debt Collection Practices Act (FDCPA) class action against a debt collector over allegedly improper letters dealing with unpaid E-ZPass tolls and associated penalties. 

In the putative class action, Plaintiff Thomas E. St. Pierre (Plaintiff) alleged that defendant Retrieval-Masters Creditors Bureau, Inc. (Defendant) violated the FDCPA, (15 U.S.C. § 1692, et seq.), because Defendant, a debt collector, mailed Plaintiff, and other similarly situated debtors, envelopes with glassine windows through which their account number and other personal information was visible.

Fortunately for the Defendant, the court ruled that such obligations do not constitute a “debt” under the FDCPA and as a result there was no FDCPA violation. The case is St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., (Case No. 15-2596, U.S. District Court, District of New Jersey). 

A copy of the court’s opinion can be found here.


The allegations in the Complaint were straightforward. 

Plaintiff alleged that he contracted with New Jersey E-ZPass (E-ZPass) to participate in its electronic toll payment program (the Agreement), which allows tolls to be collected from an E-ZPass account through an electronic transponder. Plaintiff also alleged that, pursuant to the Agreement, he was required to maintain a prepaid balance, and, at the moment he passed through a lane accepting the electronic payment, E-ZPass would automatically deduct the required toll charge from his account balance. When he passed through a lane with insufficient funds in his account, he was subject to penalties for nonpayment of the toll. 

Plaintiff claims that Defendant sent him a collection letter, dated November 11, 2013, attempting to recover $60.06, which “constituted a combination of unpaid tolls and associated penalties….” In that letter, Defendant advised Plaintiff that, because he had not “maintained a sufficient prepaid balance,” E-ZPass revoked his privileges and assigned the unpaid obligation to Defendant for collection. Defendant also warned Plaintiff that the continued use of the New Jersey E-ZPass tag would result in toll evasion violations and administrative fees.” 

Nearly seven months later, Defendant sent him another collection letter, dated June 16, 2014, attempting to recover “the amount of $1,200.75, which represented a combination of unpaid tolls and associated penalties.” 

Plaintiff did not challenge the validity of the underlying obligation to pay outstanding tolls and penalties. In his single-count Amended Complaint, Plaintiff asserted that Defendant violated § 1692f(8) of the FDCPA “by sending E-ZPass collection letters to Plaintiff and members of the putative Class in envelopes with glassine windows through which their account numbers were made visible.” 

Defendant moved to dismiss the Complaint Under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

Editor’s Note: Under rule 12(b)(6), a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” 

Defendant argued that the Complaint should be dismissed because Plaintiff failed to allege a concrete harm sufficient to establish Article III standing under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). In the alternative, Defendant contended that the obligation it sought to recover – the delinquent toll charges and penalties – is not a “debt” as defined by the FDCPA. 

Spokeo Argument 

The 23 page opinion was issue by the Honorable Freda L. Wolfson, United States District Court Judge. Judge Wolfson devoted nine pages to the Spokeo Article III standing issue.  Wolfson reviewed the various FDCPA Spokeo cases in the Third Circuit. Wolfson ultimately determined that Plaintiff did, in fact, have Article III standing to bring this claim. Wolfson wrote: 

“Accordingly, because the FDCPA unambiguously grants Plaintiff a statutory right to be free from the disclosure of private information that could expose his status as an alleged debtor, and that the right to privacy is an interest that has long been recognized at law, the Court concludes that Plaintiff has adequately alleged the concreteness requirement under Article III.” 

The Tolls and Penalties do not constitute a “debt” under the FDCPA Argument  

The court then moved to the Defendant’s argument that since tolls and penalties do not constitute a “debt” under the FDCPA, there can be no FDCPA violation in this case. 

Wolfson wrote: 

“In order to state a claim under the FDCPA, “a plaintiff must prove that (1) [he] is a consumer, (2) the defendant is a debt collector, (3) the defendant’s challenged practice involves an attempt to collect a ‘debt’ as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.” Here, Defendant argues that the delinquent tolls and penalties are not “debts” under the FDCPA, and, as a result, the Court must determine whether those particular obligations fall within the purview of the Act – an issue that only a few federal courts throughout the country have previously addressed. 

“Debt” is defined as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes….” 15 U.S.C. § 1692a(5). Although Congress has not defined the term “transaction,” the Third Circuit has explained that the “debt” must arise out of a pre-existing relationship in which a debtor voluntarily elects to avail himself of either consumer goods or services.”

Wolfson likened tolls to taxes and referenced the case of Staub v. Harris, 626 F.2d 275, 278 (3d Cir. 1980) which held that that taxes were not a “debt” under the FDCPA. 

“Thus, the obligation to pay tolls does not arise from a transaction that is “primarily for personal, family, or household purposes. Under the FDCPA, an obligation is not a “debt” if that obligation arises out of the operation of law, as opposed to a consensual consumer “transaction. “

The Plaintiff’s argument was that the amount in issue, while originating from unpaid tolls and penalties, was now part of a consumer transaction between himself EZ-Pass and that the Agreement is the source of his obligation to pay the unpaid tolls and penalties. 

Judge Wolfson disagreed. Portions from Wolfson’s opinion:

“This Court respectfully disagrees with their conclusion that, when a person contracts with an electronic toll collection provider, the arrangement somehow changes or alters the underlying source of the obligation to pay those tolls and penalties. 

Here, Plaintiff’s obligation to pay the outstanding tolls and penalties did not arise out of the Agreement between Plaintiff and E-ZPass; instead, it is clear that New Jersey state law is the source of the obligation at issue. When any individual opts to travel on the New Jersey Turnpike or the Garden State Parkway, state law establishes the obligation to pay the tolls, which are prescribed by the New Jersey Turnpike Authority. 

For the reasons set forth above, Defendant’s motion to dismiss the Amended Complaint is GRANTED.” 

insideARM Perspective 

This is an interesting case and should be reviewed and considered by any firm collecting tolls or other similar fees. 

Even though the defendant was successful in the motion to dismiss, readers should note the potential exposure had the case not been dismissed for the reasons stated.  The better lesson to be taken from the case is to be aware of the multitude of prior “envelope cases” and the risks associated with use of envelopes that disclose and account numbers or other identifying information.  

With assistance from Joann Needleman of ClarkHill, insideARM maintains a free FDCPA resources page to provide the ARM community a destination for timely and topical information on the Fair Debt Collection Practices Act (FDCPA). The cornerstone of the page is a chart of significant FDCPA cases. Click on the link in the chart for the complete text of the decision. Where insideARM has already published a story on the case, we provide a link. That chart contains several prior “envelope cases.”

Next Article: CFPB Quietly Issues 2017 FDCPA Report to ...