Tuesday, February 17, 2015

FDCPA: Judge Enters Show Cause Order Against Consumer and Counsel

In a scathing opinion, an Eastern District of New York judge has sent fair warning to the FDCPA plaintiff’s bar, leaving no doubt as to his thoughts concerning  how the FDCPA’s use has deteriorated in recent years.  In Huebner v. Midland Credit Management, C.A. No. 14-cv-6046 (E.D.N.Y. Feb. 11, 2015), the court entered an Order requiring plaintiff and his counsel to show cause why the complaint should not be dismissed with fees awarded pursuant to 15 U.S.C. 1692k and sanctions awarded pursuant to Rule 11. 

The complaint centers around one phone call between the consumer and the collection agency which was initiated by the consumer.  The complaint alleges that defendant "wrongfully stated to the Plaintiff that he could not orally dispute the debt" and that "he must have a reason to dispute a debt." The complaint asserts that defendant "made the above false statements in violation of 15 U.S.C. §§ 1692e(8) and 1692e(10)."  The call transcript, which was produced to the court at its own behest, however, told another story.  As noted by the court the consumer repeatedly attempted to bait the defendant’s representative:

At one point, he asks her, "I don't understand, I can't take it off my credit card, my account without paying it?" The representative declined the bait: "That's not what I said, sir, I need to know what your dispute is before I can just delete it for you. So you're saying you want to dispute it, why is it that you want to dispute it?" Plaintiff then reverted to his refrain that the debt is "nonexistent." For the third time, the representative asked, "Did you ever have Verizon, sir?" And plaintiff would only answer "I don't understand the question you ask me, this is a non-existent debt." She responds, "[i]t's a very straightforward question. Did you ever have Verizon service?" Plaintiff again evaded the question: "Okay, but I told you, you ask me, I told you, if you tell me, you're not going to take my dispute, that's fine. I'm just going to try to see if I can get more information." The substantive discussion in the call ended with the representative saying, "I'm trying to help you with your dispute, sir, but you're not really helping me help you."

It is notable that despite the representation in the complaint that plaintiff was told he could only dispute the debt in writing, which was reaffirmed by plaintiff's counsel at the Initial Status Conference, the word "writing" is never mentioned in the call. Again, it is undisputed that following this call, defendant immediately dispatched a cessation letter and no effort was made at collection.

Moreover, the court noted that:

[t]his case has all the earmarks of a setup. Plaintiff and his lawyer decided they were going to outsmart the collection company and make a little money while at it. But this statute is not a game, and its purpose is not to provide a business opportunity. There are still consumers who are in fact harassed by debt collectors, albeit less often than prior to the statute's enactment. Those genuinely aggrieved parties are entitled to the protection of the statute. It should not be diluted to become a plaything for fast talking plaintiffs and their lawyers.

The court in concluding that a show cause order should be entered observed that

[f]requently, these cases are brought on behalf of the same debtor-plaintiffs, who seize on the most technical alleged defects in collection notices or telephone communications, often raising claims of "confusion" or "deception" regarding practices as to which no one, not even the least sophisticated consumer, could reasonably be confused or misled. These cases are often brought for the non-salutary purpose of squeezing a nuisance settlement and a pittance of attorneys' fees out of a collection company, which it will often find cheaper to pay than to litigate.

Plaintiff and his counsel have until February 18th to comply with the show cause order. A transcript of the call is attached to the court's order. http://scholar.google.com/scholar_case?case=4388497270415580672&q=fdcpa+huebner&hl=en&as_sdt=6,34&as_ylo=2015

No comments:

Post a Comment