Compliance Digest – May 23

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 www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.

Every week, AccountsRecovery.net 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 Denies Motion to Remand FDCPA Case Back to State Court; Grants MTD

A District Court judge has denied a plaintiff’s motion to remand a Fair Debt Collection Practices Act case back to state court while also granting the defendant’s motion to dismiss, ruling that the plaintiff had standing to sue in federal court, but did not state a claim on which the case could be based. More details here.

WHAT THIS MEANS, FROM COOPER WALKER OF MALONE FROST MARTIN: Our team at Malone Frost Martin was able to secure a great win with the help of our New York local counsel in this matter. This case deals with a theory of liability which many debt collectors are well acquainted with at this point—the good ol’ “I don’t owe this debt” claim. Here, as is common in most of these cases, the Plaintiff alleges not owing the debt without supporting her claim whatsoever. As this case was originally filed in state court, we decided to remove the case to federal court. Plaintiff attempted to remand, but Judge Hurd was correct in ruling that Plaintiff’s assertion of lost “costs, loss of credit opportunities, and stress,” as well as claiming actual damages are enough to establish Article III Standing at the Rule 12 stage. Of note, Judge Hurd wrote that “[n]either the removal statute, 28 U.S.C. § 1441, nor the supplemental jurisdiction statute, 28 U.S.C. § 1367, authorizes a federal court to remand claims over which it has original jurisdiction.”

After denying Plaintiff’s Motion to Remand, Judge Hurd went on to contribute to a growing body of case law supporting the industry on this issue when holding, “[a]lleging that a plaintiff does not a debt, coupled with vague claims of an FDCPA violation, is insufficient to support a claim under the FDCPA. See, e.g., Rosenberg v. Frontline Asset Strategies, LLC, 2021 WL 3617672, at *5 (E.D.N.Y. 2021); Solovyova v. Grossman & Karaszewski PLLC, 2021 WL 535209 (E.D.N.Y. 2021).” While claims such as this have proven difficult to defend in the past, it appears that courts are more willing to consider dismissing these claims at the Rule 12 stage.

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Judge Rules Debt Not For Personal Use in FDCPA Case

I don’t know about you, but with all the times that I have purchased real estate — one, to be exact — I remembered whether I was at the closing or whether I had someone attend for me, and whether I inspected the property or whether I bought it sight unseen. The inability for a plaintiff to recall such important details cost him a Fair Debt Collection Practices Act case when a District Court judge in Florida ruled in favor of the defendant following a bench trial that was held last week. Ultimately, the plaintiff’s changing recollections kept the judge from determining whether the debt in question was for personal, household, or family purposes, required to meet the definition of “debt” under the FDCPA. More details here.

WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: This case is a great reminder of how important the plaintiff’s deposition can be in mounting a defense. The complaint allegations (drafted by the attorney) were undercut and weakened by a well-planned line of deposition questions.   Here, the plaintiff’s own testimony ultimately sounded the death knell for his claims. 

Judge Grants Defendant’s MSJ in FDCPA Class Action Over Creditor ID in Letter

A District Court judge in New York has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act class action case, determining that the plaintiff lacked standing to sue because he did not suffer a concrete injury after alleging the defendant violated the statute by sending a collection letter to the plaintiff in which the plaintiff did not recognize the name of the creditor to whom the debt was owed. More details here.

WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH & VOLUCK: New York federal courts have become one of the most aggressive venues for dismissing cases for lack of Article III standing. Beyond Hunstein claims, the court has been regularly dismissing FDCPA cases brought under other sections of the Act. Practitioners need to be very cautious about removing FDCPA cases from New York State court to federal court. In short order, like in the Seventh Circuit, it is anticipated that remand orders will also award attorneys fees to plaintiffs as a sanction for improper removal by defendants. 

Complaint Accuses Collector of Violating FDCPA, Reg F Over Attempts to Collect Discharged Debt

A complaint has been filed in California accusing a collector of violating the Fair Debt Collection Practices Act and Regulation F by attempting to collect a debt through calls and text messages to the plaintiff’s cell phone after consent had been revoked and after the debt in question had been discharged during bankruptcy proceedings. More details here.

WHAT THIS MEANS, FROM JUNE COLEMAN OF MESSER STRICKLER: The Winteros v. TSC Accounts Receivable Solutions case, filed in the Central District of California on April 26, 2022, is another example that lets us know that the Plaintiff’s bar are pursuing cases involving alleged violations of the CFPB’s Regulation F. Here, the Plaintiff alleged that after her debt was discharged through bankruptcy, the debt collector continued to attempt to collect the debt by phone, even after Plaintiff requested that the calls cease. The Plaintiff also alleges that the debt collector continued to report the debt. The Plaintiff alleges that the debt collector violated the FDCPA: section 1692d for continuing to place calls after request to cease; section 1692e(8) by reporting incorrect information; section 1692e for misstating the amount of the date after discharge; and section 1692f because the foregoing was unfair. Then Plaintiff alleges an add on claim of violating Reg F, section 1006.18(b)(2) by seeking to collect a discharged debt. There are many portions of Reg F that redefine the general prohibits in the FDCPA. We see these add-on claims based on Reg F in more and more litigation. We expect that we will see more of these claims as time goes on.

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 www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.

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