It’s Independence Day weekend here in the United States, so is there a better time to discuss the First Amendment to the Constitution? The timing is just coincidental, though, to Judge Howard Neilson of the District Court for the District of Utah, who relied heavily on the First Amendment’s Petition Clause to grant a defendant’s motion to dismiss in a Fair Debt Collection Practices Act case, after it was accused of violating the statute by including a percentage-based collection charge in an underlying collection suit that was filed against the plaintiff as well as attempting to include a confession of judgment in a settlement agreement proposal.
A copy of the ruling in the case of Reyes v. N.A.R. Inc. can be accessed by clicking here.
The plaintiff incurred a healthcare debt that was placed with the defendant for collection. The defendant filed a lawsuit in Utah state court seeking to recover the balance, as well as a collection charge equal to 40% of the unpaid debt. The defendant then sent a settlement offer to the plaintiff, which included a confession of judgment. The plaintiff crossed out the language related to the confession of judgment and sent it back to the defendant. Ultimately, the two sides did not reach a settlement and the plaintiff subsequently filed suit, alleging the defendant violated the FDCPA and state law in Utah.
This is one of those times where it is important to note that not only am I not a lawyer, I’m also not American. 🙂
The First Amendment states that people shall have the right to petition the Government for a redress of grievances. It’s not as popular as other rights guaranteed in the First Amendment — such as free speech and freedom of the press — but in legal circles, it’s a bedrock principle. Alongside the Petition Clause is something called the Noerr-Pennington Doctrine, based on a pair of rulings from the Supreme Court.
In this case, Judge Neilson used the Petition Clause and the Noerr-Pennington Doctrine to disagree with other rulings that have rejected the use of these arguments in FDCPA cases, ruling that the FDCPA does not eliminate Petition Clause immunity.