Appeals Court Upholds Ruling For Plaintiff in FDCPA Case Over Garnishment Jurisdiction

The Court of Appeals for the Sixth Circuit has affirmed a lower court’s ruling in favor of a plaintiff who accused a collection law firm of violating the Fair Debt Collection Practices Act by obtaining a writ of garnishment in the wrong jurisdiction.

A copy of the ruling in the case of Thompson v. Renner can be accessed by clicking here.

A hospital obtained a default judgment against an individual — who became the plaintiff in this case — for an unpaid medical debt. The hospital hired a collection law firm — the defendant — to collect. The defendant filed a request for garnishment with a state court in Michigan, but the plaintiff worked for a hospital in Illinois. The writ was issued and served on the plaintiff’s employer, but no funds were ever withheld. The plaintiff objected to the writ, and a state court judge overturned it. The hospital appealed the ruling, which was upheld.

The plaintiff then sued the defendant, claiming it violated Section 1692e of the FDCPA by making false, misleading, and deceptive representations when trying to collect on the debt. A District Court judge granted the plaintiff’s motion for summary judgment, ruling the garnishment attempt violated the FDCPA’s prohibition on threats to “take action that cannot be legally taken” and awarded the plaintiff $22,095 in fees and damages. The defendant appealed the ruling to the Sixth Circuit. The defendant argued that a jurisdictional issue is not actionable under the FDCPA and that the garnishment request did not contain any affirmative representations regarding jurisdiction, while also claiming the plaintiff did not submit enough evidence to prove she sustained the damages she claimed to have sustained.

Ultimately, the Sixth Circuit sided with the lower court, taking an analogy provided by the plaintiff to illustrate how the defendant’s conduct constituted a deceptive practice. “We are persuaded by Thompson’s analogy of Velo/Renner’s conduct in this case to a debt collector’s deceptive practice of filing a time-barred lawsuit-which could theoretically be valid if the debtor consents to suit or fails to assert the statute-of-limitations defense-operating under the assumption or hope that the debtor will unwittingly consent,” the Appeals Court wrote. “Indeed, this appears to be exactly what Velo/Renner were hoping for-or at least the advantage they attempted to take-in the underlying state case when they argued that Ingalls’s responses to the Writ constituted consent to jurisdiction. Further, it is important to recognize that Thompson could have been prompted to pay the debt after receiving notice of the jurisdictionless Writ (instead of objecting as she did).”

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