Judge Grants MSJ for Plaintiff in FDCPA Case Over Worker’s Comp Claim

A District Court judge in Arizona has partially granted a plaintiff’s motion for summary judgment after it was sued for violating the Fair Debt Collection Practices Act because it attempted to collect on a debt that was incurred as a result of a worker’s compensation claim, while also ruling that relying solely on the information provided by the client is not enough to meet the standards of the bona fide error defense. The judge also noted that spending money on sleeping pills is enough for the plaintiff to have standing to sue.

A copy of the ruling in the case of Flores v. Frost-Arnett can be accessed by clicking here.

The plaintiff was hurt on the job and had to undergo several surgeries. One of the practices placed a debt with the defendant for collection. The defendant conducted a keyword search of the file it received from the plaintiff and found no signs that it had anything to do with a worker’s compensation claim so it sent the plaintiff a collection letter.

The plaintiff testified that he lost sleep after receiving the letter, so he went to his doctor, who prescribed sleeping pills, which cost $150. The plaintiff then sued the defendant, alleging it violated the FDCPA.

Spending $150 on sleeping pills was enough to convince Judge Douglas L. Rayes of the District Court for the District of Arizona that the plaintiff had standing to sue.

The defendant argued that a worker’s compensation debt is akin to an allegedly invalid identity theft debt and that communications regarding that kind of debt are not deemed to be false, misleading, or deceptive under the FDCPA. But Judge Rayes pointed to the FDCPA’s strict liability provision and said that it didn’t matter what kind of communication it was, that the communication in and of itself was a violation.

Judge Rayes then addressed the argument that the defendant was entitled to the FDCPA’s bona fide error defense. The key is whether the defendant “maintained procedures reasonably adapted to avoid the violation” and Judge Rayes, following Ninth Circuit precedent, ruled that relying solely on what the creditor provides is not a reasonable procedure. “If the creditor provides inaccurate information — as it did here — the software scrub won’t catch the worker’s compensation related keywords,” Judge Rayes wrote. “As such, Defendant’s procedures are not ‘reasonably adapted’ to avoiding an FDCPA violation because, at bottom, those procedures rely on a creditor to provide accurate information.”

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