How Agencies, Law Firms Need To React In Wake Of Bock v. Pressler Ruling

The ink is barely dry on the ruling from a U.S. District Court judge in New Jersey who ruled that a collection law firm did not conduct “meaningful attorney involvement” when deciding to file suit against an individual with an unpaid debt, but the ARM industry should be preparing for a wave of plaintiffs armed with a new item to include in their lawsuits against collection agencies.

There are a couple of complicated legal issues at work in this case, with one being the requirement of meaningful involvement and the other being a Supreme Court decision that requires individuals must suffer “concrete and particularized” injuries in order to be able to file suit in a federal court.

In this instance, the District Court ruled that the lack of meaningful involvement — an attorney taking only four seconds to review a case before determining to move forward with a lawsuit — was more than just a “procedural” violation of the Fair Debt Collection Practices Act. A procedural violation being the equivalent of technically imperfect behavior for which a consumer suffered no consequence. John Bedard, with Bedard Law Group, used the example of sending a notification to an individual about a pending post-dated check 11 days in advance of the scheduled deposit instead of the three-to-10 day window prescribed by the FDCPA – technically imperfect, but lacking any consumer consequence.

A bare procedural violation of the FDCPA does not rise to the Supreme Court’s Spokeo standard to warrant jurisdiction in a federal court. A procedural violation may however, be pursued in a state court, should the plaintiff so choose, in states where the standing requirements are different than the federal standard articulated in Spokeo.

According the most recent Bock decision, the lack of meaningful involvement is a “substantive” violation of the FDCPA, which adequately meets the standard for federal court jurisdiction.

The ruling in Bock v. Pressler and Pressler potentially limits the opportunity for defendants to argue that the plaintiffs did not suffer a “concrete and particularized” injury against claims by consumers asserting violations of the FDCPA for a lack of meaningful involvement by an attorney.

“Meaningful involvement claims are grounded in the FDCPA’s prohibition again misrepresentations.  For this reason, the Court found the requirement for meaningful involvement by attorneys to be a substantive legal right, not a bare procedural violation under the FDCPA,” Bedard said. “According to the Court, meaningful involvement is not just a procedural obligation; the requirement protects a substantive right.”

For third-party collection agencies wondering how this ruling affects their policies and procedures, Bedard said that agencies should review their vendor oversight programs to ensure those programs consider how “meaningfully involved” their attorneys are when handling cases.

For lawyers collecting debts, they need to pay attention to what the courts are saying about how to satisfy their obligation to be meaningful involved in their cases, Bedard said. “The Courts are failing litigants by refusing to articulate a rule on meaningful involvement rule.”

Until then, Bedard advises close monitoring of the case law on this issue.

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