Compliance Digest – July 6

I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit, email John H. Bedard, Jr., or call (678) 253-1871.

Every week, brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.

Judge Partially Grants MSJ For Defendant in FDCPA Case Over Alleged Threats, Use of Obscene Language

A District Court judge in Florida has granted a defendant’s motion for summary judgment on most of the claims in a lawsuit accusing it of violating the Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act by misrepresenting that the collector was an attorney and by using obscene and profane language during a collection call. More details here.

WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: This case represents a classic he said/she said battle and the importance of recording calls! In Rafer, the consumer levels many accusations against the debt collector, which it vehemently denied, including that the debt collector represented he was a lawyer and used words my mother would never let me use and which are rarely seen in case law. What is important about the case? It’s not earth shattering as far as the law goes, but it does highlight why recording calls may prove important to refute allegations of misconduct. The factual substance of the allegations turn on the consumer’s retelling of conversations she had with the debt collector which do not appear to have been recorded (of for which the recordings were not submitted in support of summary judgment). So many times, call recordings are important evidence (good and bad) of the substance of calls. 

A couple of interesting side notes, the Court does look below the surface with respect to the Section 1692e(2)(A). As most know, the FDCPA prohibits the use of false representations concerning the character, amount or legal status of the debt. In reviewing the consumer’s claims under that provision, the Court examined the validity of the debt. We are seeing more Courts pull back the curtain as to the validity of the debt on Section 1692e claims and focus on the debt collector’s knowledge of whether the debt is valid. Additionally, the Court was dismissive of the consumer’s claim that a voice mail message that references a “legal matter” violated Section 1692e(3) of the FDCPA. The Court noted that language was “vague and does not necessarily imply the association of an attorney.” It’s not a holding I’d hang my hat on, but interesting nonetheless and more likely reflective of the lack of credible evidence presented by the consumer at summary judgment.


Judge Awards $62k in Emotional Damages to Plaintiffs in FDCPA Case

A District Court judge in Washington has signed off on a final settlement in a Fair Credit Reporting Act class action that will see the plaintiff’s attorneys be awarded as much as 73% of the final amount that the defendant is willing to pay to settle the case after the plaintiff claimed it obtained a copy of his credit report without a permissible purpose when attempting to collect on a debt. More details here.

WHAT THIS MEANS, FROM JOHN REDDING OF ALSTON & BIRD: In case anyone still questions why plaintiff’s attorneys file collection class actions with little actual value to consumers, question no more. In Rodriguez v. Evergreen Professional Recoveries, the District Court for the Western District of Washington approved a $103,177 class settlement in a case alleging the defendant improperly accessed the class plaintiffs’ credit reports when attempting to collect outstanding traffic tickets, fully 71% of which ($73,520) was devoted to attorneys’ fees. In allowing such an outsized award of attorney fees, courts must review the settlement for “subtle signs that class counsel have allowed pursuit of their own self-interest and that of certain class members to infect the negotiations,” which may be evidenced by class counsel’s receipt of a disproportionate percentage of the settlement funds. In re. Bluetooth Headset Products, 654 F.3d 935 (9th Cir. 2011). Here, the court reviewed the time records of counsel, deemed the rates and hours expended reasonable, and granted final approval for the settlement, ignoring the relative benefit to the debtors. Results like these guarantee plaintiffs’ counsel will remain emboldened to bring actions with little overall benefit to consumers but outsized benefits to themselves. 

Judge Dismisses Hate Crime Count from TCPA Complaint

In a case that was first mentioned at, a District Court judge in Illinois has partially granted a defendant’s motion to dismiss after it was sued for violating the Telephone Consumer Protection Act for allowing wrong-number calls from debt collectors because, for some reason, the plaintiff’s name was not on the account in question. More details here.

WHAT THIS MEANS, FROM VIRGINIA BELL FLYNN OF TROUTMAN PEPPER: Just when you thought the allegations in a TCPA case couldn’t get any crazier, one Plaintiff in Illinois took things to a whole new level by suing T-Mobile for a *hate crime* for failing to assist him to stop unwanted calls.

Earlier this month, a District Court judge in Illinois partially granted a defendant’s motion to dismiss the hate crime charges after it was sued for violating the Telephone Consumer Protection Act (“TCPA”). The plaintiff, who signed up for an account with T-Mobile in 2009, alleged he began receiving wrong number calls from collection agencies a few months later. He sued a number of the collection agencies and T-Mobile, alleging violations of the TCPA against T-Mobile and the collection agencies, violations of the Fair Debt Collection Practices Act against one of the collection agencies, and a civil conspiracy and hate crime against T-Mobile. The judge agreed with T-Mobile that it did not engage in a civil conspiracy or a hate crime and dismissed those counts from the plaintiff’s complaint finding specifically that the allegations supporting that cause of action to be “incoherent” and noted that T-Mobile was not alleged to have taken any action against Plaintiff based upon a protected class so it could not have committed a hate crime.

While this case is continuing on, it is a good reminder that Plaintiff lawyers are constantly dreaming up new and innovative causes of action to test before a court.

Colo. Appeals Court Fines Hospital For Collecting From Injured Worker

A state Appeals Court in Colorado has found that a healthcare provider violated state law when it attempted to collect unpaid bills from an individual who was hurt on the job — even though the employer did not have worker’s compensation insurance — but ruled that the penalties for such a violation should not be a continuing violation in form of a daily fine of $750, instead ruling that the hospital should only be fined on the days it sent bills to the individual or when its collection agency did so. More details here.

WHAT THIS MEANS, FROM MAKYLA MOODY OF GREENBERG SADA & MOODY: The Colorado Court of Appeals affirmed an Administrative Law Judge’s punishment of a Medical Service Provider for violating the state’s prohibition against pursuing an individual for their covered work related injury debt. The fact that the employer failed to maintain a workers compensation policy depriving the Service Provider from getting paid timely is of no consequence. In these situations, the Court has made clear that the brunt of economic harm caused by the non-paying employer will be shouldered by the Provider, not the patient.

While the punishment of the Provider in this action is not surprising, the more interesting elements of the opinion pertain to how the Administrative Court obtained jurisdiction over the Provider in the first place, and how the fine was ultimately calculated. Here, the Medical Service Provider would have fared better had it refrained from acting, rather than interjecting itself into the administrative proceedings when it wasn’t properly named or served. Fortunately for the Provider, the penalty levied was ultimately assessed based upon the individual collection attempts as isolated occurrences rather than a continuing violation, which would have exponentially increase the size of the fine. It is worth noting, however, the Provider’s fine ultimately included the two collection attempts that were made by its 3rd Party Debt Collector. Keeping this in mind, therefore, Agencies should quickly communicate with their clients whenever there is an indication that the debt in question may be a covered worker’s compensation claim and all collection attempts immediately suspended. Giving Agencies a means of saving their Provider-clients from further harm.

Waiting Game Surrounding Florida’s TCPA Bill Continues

A lot of eyes that worry about autodialers and telephone calls are fixed firmly on The Sunshine State, wondering if its version of the Telephone Consumer Protection Act will go into effect next week or not. More details here.

WHAT THIS MEANS, FROM DAVID KAMINSKI OF CARLSON & MESSER: File this one under the “We knew it was coming – but from Florida Governor Ron DeSantis?? Yes!!

Governor De Santis has now signed into law Florida’s version of the TCPA as to telephone solicitation and sales calls. This law prohibits telephone solicitations and sales calls where such call involves an “automated system for the selection or dialing of telephone numbers or the playing of a recorded message” without the prior express written consent of the called party. This bill does NOT pertain to commercial calls that do not contain an unsolicited advertisement or constitute sales or marketing. It takes effect on July 1, 2021.

While the United States Supreme Court recently limited (in Facebook v. Duguid) the definition of an autodialer in the federal TCPA to equipment which has the capacity either to store a telephone number or to produce a telephone number using a random or sequential number generator, the State of Florida’s new statute requires prior express written consent for all marketing/solicitation calls made using an “automated system (undefined) for the selection or dialing of telephone numbers or the playing of a recorded message”, regardless of a prior established business relationship between the caller and the consumer. The new statute provides a private right of action for $500.00 a call and authorizes a court to increase that award for willful and knowing violations. Consumers in Florida who receive unwanted solicitation and sales calls or recorded messages may now sue businesses unless prior express written consent was in place at the time the automated system call or recorded message call was made. The new law suggests that equipment that can automatically place calls or send text messages from a list of numbers (like some types of predictive dialing equipment) may be covered under the Florida statute, whereas the federal TCPA limits autodialers to equipment which has the “capacity” to store or produced numbers using a random and sequential number generator per Facebook v. Duguid.

Is the law constitutional? Maybe not, pursuant to the recent Supreme Court decision regarding statutory constitutionality in Barr v. AAPC. More on that to follow.

The Florida “mini-TCPA” is brand new and warrants further analysis, and its impact and scope will undoubtedly be reviewed by the Courts in consumer lawsuits which will inevitably be filed in the very near future. Businesses making sales and solicitation calls to Florida consumers should consult your counsel to discuss your calling strategies in the State of Florida.

Sales and Solicitation Callers BEWARE!!!!!!!

Judge Orders Parties in FDCPA Class Action to Submit Briefs on Issue of Standing Following TransUnion Ruling

In what is reported to becoming an increasingly common development in Fair Debt Collection Practices Act cases across the country, a District Court judge in New Jersey has temporarily terminated a motion to certify a class action and issued an order to both the plaintiff and defendant in the case to submit briefs on the issue of standing following the Supreme Court’s ruling in TransUnion v. Ramirez. More details here.

WHAT THIS MEANS, FROM RON CANTER OF THE LAW OFFICE OF RON CANTER: In Madlinger v. Lyons, Doughty & Veldhuis. P.C. the Plaintiff filed an FDCPA putative class action. Mr. Madlinger sought to represent a class of all New Jersey consumers who were “sent” a collection letter by the Defendant Law Firm disclosing that the balance of the debt may increase “due to charges allowed by your Agreement.” 

The Law Firm defended the action and, in a pending Motion for Summary Judgment, argued that the Plaintiff’s agreement with his creditor permitted the Law Firm to increase the balance by court costs and service fees when paid. The Law Firm was recently successful on this precise issue in Saroza v. Lyons, Doughty & Veldhuis, P.C., (United States District Court for the District of New Jersey Case No. 17-523, decided June 22, 2021) where the court rejected the consumer’s argument that court costs and service fees could only be added upon entry of judgment. Instead, the court held that the terms of a similarly worded credit agreement permitted the Law Firm to add court costs and service fees at the time these expenses were incurred.

As to the putative class claim in Madlinger, the Law Firm asked for supplemental briefing on the question of whether class members who were “sent” a collection letter, but who never received it, or who received the letter but never read it, lack standing. The Law Firm cited the Supreme Court’s ruling in TransUnion v. Ramirez to the effect that a consumer who does not open a mailing suffers no harm sufficient to satisfy Article III standing requirements.

The Court has suspended the Motion for Class Certification in Madlinger pending supplemental briefing. A decision is not expected for several months.   

Judge Grants Motions to Compel, Dismiss in FDCPA, TCPA Class Action

A District Court judge in California has granted a defendant’s motion to dismiss with prejudice and motion compel arbitration in a class-action case alleging violations of the Fair Debt Collection Practices Act and Telephone Consumer Protection Act over an unpaid credit card debt. More details here.

WHAT THIS MEANS, FROM JUNE COLEMAN AT MESSER STRICKLER: The moral of the story in Hartranft v. Encore Capital Group is to follow the court’s orders, conduct the litigation in accordance with civil procedure, do not make outlandish claims, and keep track of all the times the opposing counsel does one of these. Failing to do any of these is likely to upset your judge, for good reason. Once an attorney has the litany of missteps that this plaintiff’s attorney did, the attorney will lose credibility and so will the client. Here, the plaintiff claimed a violation of the TCPA – but the credit card agreement specifically provided consent to make dialer calls for the original creditor and all others. The plaintiff’s attorney failed to show for a settlement conference and failed to show for an Order to Show Cause hearing as to whether the attorney should be sanctioned. And while the complaint alleged an FDCPA claim, there was insufficient allegations to meet the pleading standard. And while Plaintiff failed to argue that Encore could not compel arbitration, Plaintiff instead argued that he was not subject to the contractual arbitration provision because he had not signed the document. And the fact that the consumer ran up $16,000 in credit card debt probably did not help the consumer’s credibility either. Ultimately, after over two years of tactics, the Court found it appropriate to grant the arbitration request, but also dismiss the claims as implausible given the evidence. So the moral of the story – take care of the litigation and you will have credibility with the Court and so will your client.

I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit, email John H. Bedard, Jr., or call (678) 253-1871.

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