Judge Denies MTD in FDCPA Case While State Court Case is Ongoing

A District Court judge in Minnesota has denied a defendant’s motion to dismiss, and in the alternative, a motion to stay a lawsuit filed by a plaintiff alleging the defendant violated the Fair Debt Collection Practices Act during the course of filing its own lawsuit against the plaintiff in an attempt to collect on an unpaid debt.

A copy of the ruling in the case of Becker v. Portfolio Recovery Associates can be accessed by clicking here.

The defendant filed a collection lawsuit in state court against the plaintiff, which is proceeding toward a trial after the state court judge denied a motion for summary judgment filed by the defendant.

While that case is ongoing, the plaintiff filed her lawsuit in federal court, alleging the defendant violated numerous provisions of the FDCPA, including not sending any written communication to the plaintiff prior to filing the original collection lawsuit, violating the provisions of a consent order entered into with the Consumer Financial Protection Bureau by failing to obtain proper documentation prior to filing a lawsuit, and for attempting to collect a debt in Minnesota without the proper license.

The defendant filed a motion to dismiss or stay, arguing that the allegations made by the plaintiff mirror claims that have been made in the state court action and the “merits of” the plaintiff’s FDCPA claims hinge on the outcome of the state court case.

But Judge Susan Richard Nelson of the District Court for the District of Minnesota found the defendant’s arguments to be “unpersuasive” because the alleged FDCPA violations have already occurred, when the state court action was filed, and do not depend on the outcome of that case.

“While the merits of Becker’s FDCPA claims overlap with some of Becker’s defenses in the state court litigation (e.g., the validity of PRA’s assignment), that overlap does not render Becker’s FDCPA claims unfit for judicial decision,” Judge Nelson wrote.

After denying the motion to dismiss, Judge Nelson also looked at the defendant’s arguments to stay the case and ruled against each one. “…the factual and legal overlap between the cases — and the concerns of judicial economy and cost PRA invokes — do not rise to the level of hardship or inequity required to overcome the presumption against a stay,” Judge Nelson wrote.

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