Law Firm's Garnishment Activities Do Not Violate FDCPA

Courts have long debated  the extent to which a debt collection attorney’s representations to opposing counsel or the court during the course of litigation may violate the FDCPA and the results from different circuits have varied greatly.  See, e.g.,  Hemmingsen v. Messerli & Kramer, 674 F.3d 814 (8^th Cir. 2012);  O’Rourke v. Palisades Acquisition XVI, LLC, 635 F. 3d 938 (7^th Cir. 2011); Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6^th Cir. 2009); Sayyed v. Wolpoff & Abramson, 485 F. 3d 226 (4^th Cir. 2007).  A recent decision by a Minnesota district court sheds some light on the issue and provides a positive decision for debt collection attorneys. Carney v. Unifund CCR, LLC, 2016 U.S. Dist. LEXIS 168707 (Dec. 6, 2016). 

The case arose from the law firm’s post judgment efforts to garnish wages.  After serving a garnishment summons, the consumer claimed the funds  as exempt.  The collection attorney filed an objection to the exemption, but filed it one day late.  Because of the untimeliness of the objection, the court ordered the funds released without making a ruling on the merits.  The defendants then made four additional attempts to garnish funds. The consumer filed suit against the creditor and its attorneys asserting the defendants violated sections 1692e and f by making further attempts to garnish wages which defendants knew were exempt and by making false representations in the objection as to its merits and as to its timeliness.  The defendants moved to dismiss.

In ruling in favor of the defendants, the court determined that there was nothing unlawful in defendants’ multiple efforts to garnish wages and noted that there had been no adjudication on the merits as to whether the consumer’s funds were exempt. 


Turning to whether the defendants had made false representations to the state court over the timeliness of their objection, the court looked to whether the defendants’ actions were permissive litigation activity.  The court began its analysis with a review of the Supreme Court’s decision in Heintz v. Jenkins before turning to the Eighth Circuit’s analysis of permissive litigation activities.  The court noted that, at least in the Eighth Circuit, the analysis is done on a case by case basis.  In reviewing the representations at issue, the court looked to whether the representations were closely related to the actual debt collection.  In determining the representations were permissive litigation activity, the court noted the purported misrepresentations were as to a filing deadline and had nothing to do with the amount of the debt or the debt itself and were not made to the debtor.  Carney at * 12.  To the contrary, the “alleged misrepresentations were arguments that, if accepted, would have permitted the state court judge to hear the merits of Defendants’ objection.  That Defendants’ arguments were rejected does not lead to a plausible inference that the statements were false or misleading.”  Id.  The key to the decision was the attorney’s ability to put as much separation as possible between the representations at issue and the consumer and the associated debt.