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 Grants MTD in FDCPA Case Over Undated MVN
For anyone facing a lawsuit over sending an undated Model Validation Notice — or anyone worried about facing such a suit — a District Court judge in Illinois has granted a defendant’s motion to dismiss a suit accusing it of violating the Fair Debt Collection Practices Act because it sent the plaintiff an undated MVN, ruling the plaintiff lacked standing to sue because she did not suffer a concrete injury. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: There is nothing more irritating than a frivolous, ticky-tacky lawsuit. But these “undated letter” cases are uniquely irritating. The Model Validation Notice does not include a date! Thus, an “undated letter” claim should be prevented under Regulation F’s safe harbor provision. Unfortunately, not all courts have seen it that way. Some courts have concluded that an undated letter does not give rise to any violation, while others have determined that an undated letter may constitute a violation if it causes confusion. Here, the court concluded that the plaintiff’s allegations lacked any “concrete injury” and therefore she had no standing to sue. Even so, the court noted that there could be a “case in which a plaintiff plausibly alleges that absent confusion, she would have paid the debt” thereby causing some concrete injury. It’s nothing if not inconsistent. Fortunately, there is good news and an easy fix: Include the date on your letters.
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Judge Grants MSJ in FDCPA Case Over Call Volume, Use of Local Number
A District Court judge in North Carolina has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case, ruling the use of a local phone number from a collection agency based in another state and that 14 phone calls placed during a one-month period — even though 13 of those calls were made outside of the actionable period — did not violate the statute. More details here.
WHAT THIS MEANS, FROM XERXES MARTIN OF MARTIN LYONS WATTS MORGAN: The opinion in Brayton v. Alltran Fin., LP is a nice order bolstering prior favorable case law on call volume / harassment, and use of localized area codes. Judge Max O. Cogburn, Jr. presents a very detailed analysis backed by numerous cases supporting the opinion. Specifically, to the call volume as a form of harassment claims, he provides a laundry list with many of the best cases primarily showing call volume with no communication with the debtor cannot show the required intent for harassment. Defense counsel reading this order should save this list for future briefing against similar allegations. As to the local area code claims, Judge Cogburn took a belt and suspenders approach, first using binding precedent that the telephone numbers are not misleading, and second using persuasive cases that it is not a material misrepresentation. A thanks goes out to the court for the detailed opinion despite the plaintiff not responding to the summary judgment motion.
Judge Grants MSJ for Defense in FDCPA, FCRA Case Over Payment Coupon Created by Plaintiff
We’ve all heard stories about those “special” consumers, those who claim to be sovereign citizens and don’t have to follow the rules that the rest of us do. They believe that courts have no jurisdiction over them and that they are immune from having to follow the laws. A plaintiff in Maryland is learning the hard way that creating your own form of currency and using it to pay a debt doesn’t necessarily mean the debt is paid after a District Court judge granted a defendant’s motion for summary judgment in case alleging violations of the Fair Debt Collection Practices Act and Fair Credit Reporting Act. More details here.
WHAT THIS MEANS, FROM KHARI FERRELL OF FROST ECHOLS: This case reaffirms the age-old adage, “money doesn’t grow on trees.” Apparently, the plaintiff did not consider the wisdom in that saying prior to filing this lawsuit.
Here, the Court logically reasoned that if a consumer claims to have tendered payment for a debt to the original creditor, using a self-created, fictitious form of currency, he “simply did not pay the debt owed to the original creditor.” Therefore, the debt at issue remained outstanding, even after the plaintiff’s attempt to pay it using what essentially amounted to monopoly money.
Because of this, the defendant, by way of subsequently purchasing the debt in question, had a legal right to collect the debt. Furthermore, because the plaintiff’s invalid form of payment did not constitute actual payment of the debt, the plaintiff was unable to “show that there was some inaccuracy or falsity with respect to LVNV’s attempts to collect her debt.” Thereby, allowing the Court to grant summary judgment in favor of the defendant.
Judge Grants MTD For Defendants in FDCPA Case Filed by Sovereign Citizen
Another day, another sovereign citizen claiming that the government should be responsible for paying his debts. And, just like in the case mentioned yesterday, this case was dismissed by a District Court judge, this time in North Carolina. More details here.
WHAT THIS MEANS, FROM LAURIE NELSON OF AUTOSCRIBE: This case is an example of what the FBI refers to as “paper terrorism” by “sovereign citizens”. The term “sovereign citizen” is a catch-all phrase referring to several loosely connected groups centered around a similar theme, anti-government. They believe that even though they physically reside in the United States that they are separate or ‘sovereign’ from the United States. The term “paper terrorism” refers to using false liens, frivolous lawsuits, bogus letters of credit, and other legal documents lacking sound factual basis as a method of harassment. The Plaintiff, in this case, self-identified as a sovereign citizen and filed what the Court held as a frivolous lawsuit against several defendants, two of which he filed a previous lawsuit that the Court also held as frivolous. Sanctions were not ordered by the Court this time, but the warning sanctions may be addressed if the Plaintiff continues to file what the Court finds to be frivolous filings.
So, what can we do to stop this ongoing trend? Unfortunately, not much. While some states have enacted laws to find it criminal to file false financial documents against individuals, restricting “sovereign citizens” from engaging in paper terrorism in the way of court filings has been found to be contrary to the fundamental right to access justice. Solutions that some purpose, increased filing fees or sanctions, would inevitably harm others who don’t have the means to pay increased fees or will not file due to fear of the increased sanctions. Furthermore, the sovereign citizen’s ideology that the government is out to punish and silence them would be validated with any legal action to restrict them from using the judicial system. There is not an easy solution; therefore, companies continue to be at risk of the costs of defending such actions. This risk will continue to be a cost of business until the acts of the sovereign citizens cease or a legal solution can be found to prohibit such; both are unlikely to occur anytime soon.
Judge Grants Partial Summary Judgment for Plaintiff in FDCPA Case
A District Court judge in Arizona has granted a plaintiff’s motion for partial summary judgment in a Fair Debt Collection Practices Act case, while also ruling that the statutory limit of $1,000 for a violation of the statute applies to each of the defendants in FDCPA cases and does not represent the maximum that a plaintiff can receive. More details here.
WHAT THIS MEANS, FROM DAVID SHAVER OF SURDYK DOWD & TURNER: Judge Brnovich’s Order in Casillas appears to represent a departure from the rule that additional or “statutory” damages under the FDCPA are limited to a maximum of $1,000 per “action.” Relying on an unpublished 2018 case from the Eastern District of California, an unpublished 1997 case from the Western District of Wisconsin (which the 2018 California case relied on as well), and the language “any debt collector who fails to comply with any provision of this subchapter” in 1692k(a), Judge Brnovich was persuaded that the statutory damage cap provided for in 1692k(a) should apply “per defendant-debt collector.”
Absent a reversal by the Ninth Circuit (or perhaps regardless of), this Order will almost certainly be cited in future cases by consumers who sue multiple debt collectors under the FDCPA at the same time. Consumers and their counsel are, invariably, looking to maximize recovery in every case. Though Casillas may support them in that quest, the circumstances presented appear to make Casillas distinguishable and ARM defendants and their counsel should be able to continue to argue that Congress intended to cap statutory damages at $1,000 per action/proceeding and that the weight of authority (for the last 30+ years) supports that conclusion.
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.