State Court Judge Dismisses Hunstein Class Action

A state court judge in Illinois has granted a defendant’s motion to dismiss a Hunstein class-action case, ruling that the process of the defendant sending the information to the vendor that prepared and mailed the collection letter was not a communication in connection with the collection of a debt, and therefore, not subject to the Fair Debt Collection Practices Act case.

A copy of the ruling in the case of Stallworth v. Terrill Outsourcing Group can be accessed by clicking here.

Astute readers of will remember reading about this case last June, when a federal judge granted the plaintiff’s motion to remand the case back to state court, but in doing so, provided an analogy that showed why Hunstein cases should not be considered third-party disclosure violations of the FDCPA.

The plaintiff received a collection letter from the defendant, which was allegedly sent by a third-party vendor. Communicating the plaintiff’s “private” information to the debt allegedly violated Section 1692c(b) of the FDCPA. But, as Judge Eve M. Reilly from the Circuit Court of Cook County noted, that section of the statute says:

Except as provided in section 1692b of this title, without the prior consent ofthe consumer given directly to the debt collector, or express permission of a court of competent jurisdiction, or as reasonable necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

In filing its motion to dismiss, the defendant argued the plaintiff failed to state a claim in her complaint.

Judge Reilly noted that the communication in question is the one between the defendant and the vendor. The plaintiff did not allege that the defendant made a demand for payment when it sent the plaintiff’s information to the vendor, because the vendor did not have a relationship of any kind with the plaintiff. The relationship between the defendant and the vendor showed that the purpose of the communication was not to induce payment. The plaintiff herself stated in her complaint that the communication was “a matter of course.”

“Objectively, the purpose and context of Defendants’ communication to the letter vendor was not to induce payment, rather it was to provide necessary information for the letter vendor to populate a letter on behalf ofDefendants,” Judge Reilly wrote. “Plaintiff’s own allegations are worded in such a way that supports Defendants’ argument that their communication was not intended to induce payment. Even in construing the facts in a light most favorable to Plaintiff, it is clear that Defendants’ communication to the letter vendor was not made in connection with the collection of a debt.”

Putting a cherry on top of the sundae, Judge Reilly noted that she “does not believe that the type of communications at issue here are the type of abusive debt collection practices the FDCPA was meant to prevent.”

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