Sunday, March 22, 2015

Nebraska District Court Rules in Favor of Law Firm on Meaningful Involvement Issue

A Nebraska district court has determined that a law firm’s letter did not violate the FDCPA and dismissed the consumer’s complaint.  In Spurgeon v. Frederick J. Hanna & Associates, the consumer alleged that a collection letter was false and deceptive and implied that the communication was from an attorney.  Spurgeon v. Frederick J. Hanna & Associates, C.A. No. 4:14-cv-03098 (D. Neb. Mar. 17, 2015).  The letter in question was sent on law firm letterhead to a consumer in Nebraska and provided in part:

This firm is licensed in Georgia, Florida, Missouri and South Carolina.  Although we are a law firm, no attorney has evaluated your case, nor have we been engaged to file a lawsuit.  Further, no attorney with this firm has personally reviewed the particular circumstances of your account.  This is an attempt to collect a debt.  Any information will be used for the purpose.

The court granted the law firm’s motion to dismiss, holding as a matter of law that there was no misrepresentation of attorney involvement under 15 U.S.C. §1692e(3) and (10).   The court recognized the public policy behind a debt collector sending a collection letter that is seemingly from an attorney; however, the court noted that there is no express prohibition against a lawyer fulfilling a role as a debt collector.  See Greco v. Trauner, Cohen & Thomas, L.L.P. , 412 F.3d 360, 364-365 (2d Cir. 2005).  The court noted that letters that have been found acceptable contained, either in the body of the letter or on the same page as the body of the letter, disclaimers that no attorney had reviewed the consumer’s file and that the attorney or firm had not been retained to file suit.  Id.  In this case, the court determined that the law firm took sufficient steps to explain their role as a debt collector and disclaim any misapprehension of attorney involvement.  Specifically, the court determined that the letter: (a) set forth the firm’s role in attempting to collect a debt; (b) expressly stated no attorney had reviewed Spurgeon’s file; (c) expressly stated that no attorney had reviewed the particularly circumstances of Spurgeon’s account; (d) expressly stated that the firm had not been engaged to file a lawsuit; and (e) did not threaten legal action of any kind.  The court noted that while the letter set forth what states the firm was licensed in, Nebraska (the state to where the letter was sent and in which Spurgeon resided) was not one of them and thus, by omission, the law firm had informed Spurgeon that its attorneys cannot practice law in Nebraska. “When an attorney/debt collector and his or her law firm are transparent about what role they are playing in the collection of a debt and do not confuse the message with contradicting or ambiguous statements, their collection letters will not be deemed misleading or fraudulent for the purposes of the FDCPA merely because those letters appear on attorney letterhead and are from an attorney acting as a debt collector and not legal counsel.”   Spurgeon, Slip Op. at 6.

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