Judge Warns Defense Over Omissions in Denying Motion to Dismiss FDCPA Case

A federal judge in Florida has denied a defendant’s motion to dismiss a class-action lawsuit alleging the company violated the Fair Debt Collection Practices Act and the Florida Consumer Collections Act by charging a convenience fee when making monthly withdrawals from the plaintiff’s bank account.

A copy of the ruling in Brotz v. Simm Associates can be accessed by clicking here.

The plaintiff and the defendant entered into an agreement where the plaintiff authorized the defendant to withdraw payments from her checking account every month to repay a student loan. The agreement did not include any reference to a convenience fee, which the defendant also allegedly withdrew every month.

In making its case that the suit should be dismissed, the defense used a ruling from the Supreme Court in Bristol-Myers Squibb v. Superior Court, by asserting that personal jurisdiction over claims by out-of- state putative class members is improper. Other rulings in collection-related cases have also invoked the Bristol case in recent months.

The ruling in Bristol found that a California state court exercise of personal jurisdiction over non-California residents violated the Due Process clause of the Fourteenth Amendment. The defense in Brotz argued that non-Florida residents should be dismissed from the class-action on the same grounds, citing six cases in which District Courts across the country have applied the Bristol ruling. However, as Judge Paul Byron noted in his ruling, the defense is only telling “half the story,” because it notably left out any of the decisions in which District Courts have ruled that Bristol does not apply in the class action context.

“While Defendant’s omission does not technically violate Florida’s ethical rules — which require the disclosure of binding caselaw directly adverse to the advocated position—the Court takes notice of defense counsel’s lack of candor,” Judge Byron wrote in his ruling.”Defense counsel is reminded that the ‘duty to a client can never outweigh his or her responsibility to see that our system of justice functions smoothly.’ ”

In denying the motion to dismiss, Judge Byron gave the defendant 14 days in which to answer the amended complaint.


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