Hunstein Update: Deadline to File Petition Extended, More Lawsuits Being Filed

The defendant in the Hunstein case before the Eleventh Circuit Court of Appeals yesterday asked for, and received, a two-week extension to file its petition for an en banc rehearing before the entire panel of Eleventh Circuit judges.

The deadline to submit the petition was originally set for May 12, three weeks after the ruling had been announced. The new deadline to submit the petition is May 25. Parties filing amicus briefs will have seven days following the submission of the petition for rehearing to submit their arguments why they think the case should go before the entire Eleventh Circuit.

The petition for an en banc rehearing is an attempt by the defendant to have the ruling issued by the three-judge panel set aside and overturned. If the Eleventh Circuit grants the petition to rehear arguments in the case, it could overturn the ruling that the three-judge panel issued, or choose to uphold it. If the petition to rehear the case is denied, or the full panel upholds the ruling, the case then returns to the District Court, where it is likely that the plaintiff will win a motion for summary judgment base on the Appeals Court ruling. The defendant would be able to appeal that ruling back to the Eleventh Circuit, if it wanted to try its luck with a different panel of judges.

In order to undo the ruling — if the Appeals Court does not change its mind — the industry would have to have a case go before another Appeals Court and have it rule that the transmission of information did not constitute a communication under the FDCPA and then ask the Supreme Court to determine which court is right. That is a process that could take years.

There were more than 50 lawsuits filed in the 10 days after the Eleventh Circuit issued its ruling in Hunstein v. Preferred Collection and Management Services, according to WebRecon, which tracks litigation filed against debt collectors. Nearly 70% of those lawsuits are class actions, according to WebRecon’s database.

Worse news for collectors is that complaints are now popping up where the accusations expand beyond just the use of letter vendors. One complaint cited the sharing of a plaintiff’s information with a skiptracing company, a dispute-management platform, and another third-party vendor.