The 3rd Circuit Court of Appeals has vacated a judgment against the law firm of Pressler & Pressler, which had been sued for the manner in which the firm filed suits against individuals with defaulted debts.
The case, Bock v. Pressler & Pressler, is considered to have far-reaching implications for the collections industry. It has been remanded back to the U.S. District Court for the District of New Jersey to determine whether the plaintiff has standing to file the suit against the law firm.
Originally, the plaintiff was sued by the law firm for a defaulted debt. A settlement was reached, but then the plaintiff filed a suit against the firm, alleging that the attorney in charge of the plaintiff’s case did not conduct a meaningful review of his account before making the decision to file a lawsuit. The attorney for Pressler admitted that he spent about “four seconds” reviewing the account before moving forward with the lawsuit.
The appeals court, however, looked to the Supreme Court decision in Spokeo v. Robins in rendering its decision. In Spokeo, the Supreme Court ruled that a lawsuit should not move forward unless the plaintiff suffers “concrete” damage. Short of suffering actual harm, there really is no reason to file a lawsuit in federal court, the Supreme Court has ruled.
Since Bock suffered no real damage or injury in his case, the Appeals Court has ruled that the plaintiff’s standing to sue must be decided before the case can move forward. The case had been appealed to the Third Circuit prior to the Spokeo ruling being issued earlier this year.
Manny Newburger of Barron & Newburger represented Pressler in its appeal. A number of groups, including the Consumer Financial Protection Bureau, had filed amicus briefs supporting the plaintiff.