The Court of Appeals for the Fifth Circuit has upheld a lower court’s summary judgment ruling in favor of a collector that was sued for allegedly violating the Fair Debt Collection Practices Act, although it did admit the District Court erred in ruling that the plaintiff failed to plead actual damages.
A copy of the ruling in the case of Willis v. Portfolio Recovery Associates can be accessed by clicking here.
The defendant sent the plaintiff a collection letter in April 2014 in which the plaintiff did not recognize the account number. The plaintiff requested validation and received a letter from the defendant that included a credit card statement showing a different account number — which he did recognize. The plaintiff then began making payments on the debt. In December 2014, the defendant sued the plaintiff to recover the unpaid debt.
While the case was awaiting trial, the defendant entered into a consent order with the Consumer Financial Protection Bureau.
During the trial, in January 2016, the plaintiff argued that the defendant had failed to provide any documentation for the account number in the original letter and the defendant agreed to voluntarily dismiss its lawsuit. The defendant sent the plaintiff another letter advising him of his right to obtain documentation of the defendant’s ownership of the debt, which the plaintiff requested. The defendant sent another letter referencing the original — incorrect — account number but including a statement from the correct account. The plaintiff filed a complaint with the CFPB, which verified that the defendant owned the original account.
In March 2017, the plaintiff filed suit, claiming the defendant violated the FDCPA by lacking validation of his debt prior to his January 2016 trial, failing to provide timely validation of his debt in violation of the consent order, and misrepresenting that it intended to prove ownership of his debt if contested.
A magistrate judge ruled that the claim of invalid debt ownership was time-barred and that the plaintiff failed to show actual damages on the other two counts. A District Court judge adopted the magistrate judge’s ruling and granted summary judgment for the defendant.
While determining that the District Court erred in ruling that the plaintiff failed to plead actual damages, because actual damages are not required to ground statutory damages, the Appeals Court did rule that the claim of invalid ownership of the debt was time-barred since the plaintiff’s lawsuit was filed 14 months after the defendant failed to provide documentation of the debt during his original trial.
On the other two claims, the plaintiff lacks standing because a private individual can not bring actions to enforce violations of consent orders, the Fifth Circuit ruled. Because the consent order with the defendant does not provide for a private right of action, the plaintiff can not sue, the Appeals Court ruled.
