Error Leads Judge to Overturn Verdict in Favor of Defendant in FDCPA Class Action

A District Court judge in Nebraska has admitted he made a mistake and thrown out a jury verdict in favor of a defendant, determining that the plaintiffs in a Fair Debt Collection Practices Act class action should be the prevailing parties, and awarding $39,000 in damages and attorney fees.

A copy of the ruling the case of Bassett v. Credit Bureau Services can be accessed by clicking here.

The defendant was sued for allegedly violating the FDCPA and Nebraska state law over interest that was charged and how it was disclosed in a collection letter that was sent to the plaintiffs. Ultimately, the case went to a trial and a jury ruled in favor of the defendant on all counts. But Judge Joseph Bataillon of the District Court for the District of Nebraska decided to intervene and grant a judgment as a matter of law of his own initiative. Judge Bataillon determined that the Court made an error when it responded to a question from the jury during deliberations because it is against state law for a collector to try and collect interest on a debt before obtaining a judgement. That violation of state law also triggered a violation of the FDCPA, Judge Bataillon ruled.

“The Nebraska Supreme Court considers it essential that parties who may be liable for statutory prejudgment interest have an opportunity to be heard before a court,” Judge Bataillon wrote. “By adding and collecting interest without litigating the issue, CBS’s standard debt collection procedures deny consumers their rights to be put on notice and be heard in court.”

Because the defendant admitted to charging interest before a judgment was obtained — it thought it was allowed to do so — the defendant “necessarily misstated” the amount of the debt that was owed by the plaintiffs, which is considered a “material” violation of Section 1692e of the FDCPA, Judge Bataillon ruled. As a matter of law, he said, there was no reason for a jury to find for the defendants on that particular count.

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