Eleventh Circuit Announces En Banc Rehearing in Hunstein Case

The Eleventh Circuit Court of Appeals announced today that the entire panel of judges will rehear arguments en banc in the Hunstein v. Preferred Management & Collections case, vacating the opinion that was issued last month, and giving the industry hope that the case may be reversed.

A copy of the ruling, issued sua sponte by the Eleventh Circuit, can be accessed by clicking here.

The announcement, which caught most in the industry by surprise, comes without the defendant even submitting its petition for a rehearing after last month’s ruling, which doubled down on determining that the use of a letter vendor to print and mail collection letters constituted a communication under the Fair Debt Collection Practices Act. The only difference between the original ruling in April and the second ruling in October was that the April ruling was unanimous while the October ruling was two-to-one, with one judge changing his mind about the original ruling.

Wrote the Court:

“A judge of this Court having requested a poll on whether this case should be reheard en banc, and a majority of the judges of this Court in active service having voted in favor, the Court sua sponte ORDERS that this case will be reheard en banc. The panel’s opinion is VACATED.”

The defendant had been preparing to submit a petition requesting an en banc rehearing before all of the judges sitting on the Eleventh Circuit, and had requested an extension until early December to do so. But the Court took matters into its own hands and announced the en banc rehearing, which will be scheduled at a later date.

The twists and turns of this case have upended the entire accounts receivable management industry. Thousands of lawsuits have been filed making similar allegations as the ones in this case, and cases have proceeded across the country as everyone was waiting to see if the Eleventh Circuit would grant the defendant’s original petition for a rehearing. More than a dozen amicus briefs were filed in support of the defendant’s petition, illustrating the importance of the ruling and demonstrating the resolve with which the industry had in fighting it.

In this case, the plaintiff incurred a medical debt that was placed with the defendant for collection. The defendant electronically transmitted information about the plaintiff, including his status as a debtor, the exact balance of the debt, the entity to whom the debt was owed, that the debt concerned his son’s medical treatment, and his son’s name to a third-party company that specializes in printing and mailing letters. That information was added to a collection letter and sent to the plaintiff.

The plaintiff sued, alleging that the disclosure of the information to the letter vendor violated the third-party disclosure provisions of the FDCPA. A District Court judge disagreed and dismissed the suit, which was appealed to the Eleventh Circuit.

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