17.5.2.2 Must the Consumer’s Claim Have Been Brought As a Compulsory Counterclaim in the Collection Action?

States have different rules on compulsory counterclaims, and case law in this area is examined in NCLC’s Fair Debt Collection.¹³⁶ Whether an FDCPA claim for litigation misconduct is a compulsory counterclaim in the original collection action—and thus lost if not brought in that action—will often be determined by the facts. The Sixth Circuit has found that a collection action is not a compulsory counterclaim to an FDCPA action,¹³⁷ and the same should be the case for an FDCPA claim in a collection action.

A consumer’s claim cannot be a compulsory counterclaim in the collection action when the collector’s litigation misconduct did not occur until after the answer to the collection complaint was filed.¹³⁸ While some collection litigation misconduct arises upon the filing of the complaint, many violations accrue later on, such as false sworn statements submitted in support of summary judgment or other misrepresentations made in the course of the litigation.

An FDCPA claim for litigation misconduct can subsequently be brought when the defendant in the second case was not a party to the first case, as when the consumer sues the creditor’s attorney in the second case rather than the creditor. Beware, however, that some judges have little sympathy for a prevailing consumer who sues the opponent’s attorney. Malicious prosecution claims do not have to be brought as compulsory counterclaims. An element of the claim for malicious prosecution is that the consumer must have prevailed in the underlying litigation. Malicious prosecution cannot be raised as a counterclaim in the collection action because the consumer has not yet prevailed.¹³⁹