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Appeals Court Vacates Award in FDCPA Class Action Over Garnishments

The Sixth Circuit Court of Appeals has vacated a lower court’s ruling in favor of plaintiffs in a class action who were awarded $3,662 in damages and their attorneys who were awarded $180,000 after the court ruled the defendant violated the Fair Debt Collection Practices Act by including the costs of previous failed garnishments on each new request.

A copy of the ruling in the case of Van Hoven v. Buckles & Buckles can be accessed by clicking here.

The plaintiff defaulted on a credit card debt. The account was placed with the defendant, which filed a lawsuit in state court and won. The defendant used that to obtain a writ of garnishment on the plaintiff’s wages. The defendant filed four writs during the course of a year. On the second, third, and fourth writs, the defendant included the cost of prior failed garnishments, even though they did not result in any money changing hands.

The plaintiff filed suit, alleging the inclusion of the fees from the failed garnishments violated the FDCPA. The court found in favor of the plaintiff, awarded a class of 168 plaintiffs $22 each for a total of $3,662. The plaintiffs’ attorneys were awarded $180,000. The defendant appealed the ruling.

There is a lot of legalese in the ruling, but the Appeals Court ruled that the lower court never gave the defendant a chance to determine if it made “bona fide” mistakes that fall under the FDCPA’s Bona Fide Error defense.

“We thus remand the case to allow the district court to determine whether Buckles & Buckles made ‘bona fide’ mistakes of fact in including certain costs of prior failed garnishments and whether its procedure for preventing such mistakes suffices,” the Appeals Court ruled. “To the extent the record needs development on this issue, the parties are free to seek additional discovery.”

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