Judge Denies MTD in FDCPA Case Over Collection Fee

A District Court judge in New Jersey has denied a defendant’s motion to dismiss and a motion for sanctions against the plaintiff in a Fair Debt Collection Practices Act case that is accusing a law firm of improperly adding a collection fee in an itemization table included in a summons that was attempting to recover an unpaid medical debt.

A copy of the ruling in the case of Louis v. Desh Law can be accessed by clicking here.

The plaintiff incurred a medical debt that was placed with the defendant for collection. The defendant filed suit in New Jersey state court. In the summons, the defendant included a table breaking down the amount owed. In the table was a line item seeking to recover $88.88 in attorney’s fees. While the two sides reached a settlement in the collection lawsuit, the plaintiff filed suit in federal court, accusing the defendant of violating Sections 1692e(2)(A), 1692e(10), and 1692f(1) of the FDCPA.

In filing the motion to dismiss, the defendant argued that it was entitled to dismissal under the Entire Contrversy Doctrine because the plaintiff could have made this argument in the underlying collection lawsuit, that it was not the appropriate defendant — the creditor added the fee, the firm claimed, because the plaintiff did not allegedly suffer any damages as a result of the defendant’s actions, and because the summons does not constitute a communication under the statute.

But Judge Claire C. Cecchi had a rebuttal for each of the defendant’s arguments and denied the motion to dismiss. Regarding the communication argument, Judge Cecchi said, “Here, Defendant does not dispute that the State Court Summons and Complaint meet the definition of a ‘communication’ under the FDCPA. Rather, Defendant appears to argue that the State Court Summons and Complaint fall under the exemptions for formal pleadings set forth in §§ 1692e(11) and/or 1692g(d). However, Plaintiff has not asserted violations of either §§ 1692e(11) or 1692g(a). Therefore, the exemptions for formal pleadings are not implicated here.”