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This article reviews a very active 2020 concerning the Fair Debt Collection Practices Act (FDCPA). The article focuses on two sets of final Consumer Financial Protection Bureau rules on the FDCPA, one published in November and the other announced in December, and then summarizes all of the relevant 2020 circuit court of appeals FDCPA cases.

For more detail on the FDCPA and other law regulating debt collection practices, see NCLC’s Fair Debt Collection. Go to that treatise's Case Connector, a database of over 15,000 FDCPA case summaries—instantly find what you need through searches and sorts by any combination of court jurisdiction and/or level, topic, year, citation, party name, and keyword.

Two Sets of Final CFPB Rules on the FDCPA Published in Late 2020

A first set of CFPB rules amending Regulation F, 12 C.F.R. part 1006, implementing the FDCPA, and issued in the Federal Register on November 30, 2020, is scheduled to become effective on November 30, 2021. The most significant provisions: set out a presumption that a certain number of calls per week is or is not an FDCPA violation (with factors that can rebut those presumptions); permit certain use of electronic communications to provide disclosures required under the FDCPA or to collect a debt; give consumers the right to ask a collector orally to stop calling; require notice of the right to opt out of electronic communications in every message; provide a safe harbor from FDCPA liability for third-party disclosures when communicating with a consumer by email or text message where the email address or phone number were obtained using specified methods; and define certain limited debt collector voice mail messages left for consumers as outside the FDCPA’s scope. See 85 Fed. Reg. 76,735 (Nov. 30, 2020). Both a recorded video presentation and a slide deck summarizing this first set of rules is available here.

A second set of CFPB rules amending Regulation F, 12 C.F.R. part 1006, implementing the FDCPA, and announced by the agency on December 18, 2020, are scheduled to become effective on November 30, 2021, the same date as the first set of amendments to Regulation F. This rule among other things, sets out information that a debt collector must provide to a consumer at the outset of debt collection communications and provides a model notice containing such information, prohibits debt collectors from bringing or threatening to bring a legal action against a consumer to collect a time-barred debt, and requires debt collectors to take certain actions before furnishing information about a consumer’s alleged debt to a consumer reporting agency. Both a recorded video presentation and a slide deck summarizing the second set of rules is available here.

Appellate Decisions on Standing (Spokeo)

Bazile v. Fin. Sys. of Green Bay, Inc., ___ F.3d ___, 2020 WL 7351092 (7th Cir. Dec. 15, 2020). Consumer alleged violations of § 1692e and § 1692g(a)(1) because the debt collector failed to disclose whether the amount stated in a collection letter may increase due to the accrual of interest. Concluding that factual questions about whether interest was or could accrue needed to be resolved to determine whether the consumer has standing to sue, the Seventh Circuit remanded for an evidentiary hearing.

Brunett v. Convergent Outsourcing, Inc., ___ F.3d ___, 2020 WL 7350277 (7th Cir. Dec. 15, 2020). Consumer alleged violations of § 1692e(5) and (10) due to a collection letter stating that the creditor would need to file a 1099-C form with the IRS if it ended up forgiving more than $600 of an alleged debt exceeding $1000. The Seventh Circuit concluded that the consumer did not satisfy the injury element of standing and dismissed for lack of subject-matter jurisdiction. The fact that the consumer alleged a violation of substantive rather than procedural rights did not guarantee standing absent a concrete injury. Consumer confusion was insufficient to establish injury even though the confusion led her to consult a lawyer. Allegations that the letter was “intimidating” also failed to show that injury occurred. The court also held that since the consumer did not have standing, she could not represent class members who might have standing.

Buchholz v. Meyer Njus Tanick, P.A., 946 F.3d 855 (6th Cir. 2020). Finding a lack of subject matter jurisdiction, the Sixth Circuit upheld dismissal of consumer’s § 1692e(3) and § 1692e(10) claims alleging lack of meaningful attorney involvement. The consumer did not satisfy the concreteness prong of the injury in fact element of standing because the anxiety that he experienced was fear of future harm that was not “certainly impending” since there was no threat of litigation alleged. The court also rejected the consumer’s argument that a procedural violation caused a concrete but intangible injury because the court found no harm to the consumer that Congress intended to prevent or that was analogous to a harm recognized by common law. The court also held that the consumer failed the traceability element of standing because the consumer was anxious about the consequences of his failure to pay a debt that he did not dispute owing and that was not the result of an action by the debt collector.

Donovan v. FirstCredit, Inc., ___ F.3d ___, 2020 WL 7414643 (6th Cir. Dec. 18, 2020). Consumer had standing to pursue a § 1692f(8) claim where she alleged that writing visible through a glassine window in the envelope created a risk of disclosure that someone would identify this as a collection communication. The Sixth Circuit found that this risk implicates the FDCPA’s core concern about invasion of privacy and that such concerns were sufficiently concrete because they were traditionally regarded as the basis for lawsuits in English or American courts. The claim was particularized and actual since the letter was addressed to the consumer and sent from the debt collector.

Frank v. Autovest, L.L.C., 961 F.3d 1185 (D.C. Cir. 2020). After raising the issue of standing sua sponte on appeal, the D.C. Circuit concluded that the consumer failed to identify a concrete injury traceable to the false representations of the collection attorney’s employees, who stated in affidavits that they were employed by the debt buyer. The consumer stated in her deposition that she did not take (or fail to take) any action based on those false representations. She did not testify that she was “confused, misled, or harmed” by the affidavits, or connect the stress and inconvenience that she experienced to the affidavits. The court also held that “a plaintiff must demonstrate a subjective—that is, an actual—personal injury for standing even when his merits argument turns on the perspective of an objective, unsophisticated consumer” but noted that the plaintiff “need not suffer the same harm that underlies his statutory claim.”

Gunn v. Thrasher, Buschmann & Voelkel, P.C., ___ F.3d ___, 2020 WL 7350278 (7th Cir. Dec. 15, 2020). Consumers alleged violations of § 1692e(2), (4), (5), and (10) because a collection letter threatened to foreclose on the consumers’ home in order to collect homeowners association dues, arguing that this statement was false or misleading because foreclosure would have been too expensive to pursue to collect $2000. The Seventh Circuit did not reach the merits, but dismissed for lack of standing because the consumers had not alleged any concrete harm as a result of the challenged language in the collection letter. The court rejected arguments that the consumers’ annoyance or intimidation satisfied the injury requirement. It also concluded that the fact that the consumers alleged a violation of substantive rather than procedural rights did not guarantee standing absent a concrete injury.

Larkin v. Fin. Sys. of Green Bay, Inc., ___ F.3d ___, 2020 WL 7332483 (7th Cir. Dec. 14, 2020). Consumers in consolidated cases alleged that collection letters stating that the creditor was “interested in preserving a good credit rating” and urging them “to be worthy of the faith put in you by your creditor” violated § 1692e and § 1692f. The Seventh Circuit concluded that the district court should have dismissed for lack of standing, instead of failure to state a claim, since neither consumer alleged harm or risk of harm. The court also held that, “[a]n FDCPA plaintiff must allege a concrete injury regardless of whether the alleged statutory violation is characterized as procedural or substantive,” rejecting efforts to distinguish substantive claims at issue here from prior Seventh Circuit precedent involving procedural violations.

Nettles v. Midland Funding L.L.C., ___ F.3d ___, 2020 WL 7488610 (7th Cir. Dec. 21, 2020). Consumer alleged violations of § 1692e and § 1692f due to a collection letter that misstated the balance owed on a debt by about $100. The Seventh Circuit concluded that the consumer did not satisfy the injury element of standing where she failed to allege that the overstatement harmed her and remanded to dismiss for lack of subject-matter jurisdiction. Consumer annoyance and consulting a lawyer were insufficient to establish injury.

Spuhler v. State Collection Serv., Inc., ___ F.3d ___, 2020 WL 7351098 (7th Cir. Dec. 15, 2020). Consumers alleged a violation of § 1692e(2)(A) and § 1692f because collection letters did not include a statement that the debts would accrue interest. Reversing summary judgment and class certification for the consumers, the Seventh Circuit concluded that the consumers did not satisfy the concreteness element of standing because “[t]he record contains no evidence that the absence of a statement about interest had any effect on how the [consumers] responded to the letters or managed their debts.”

Trichell v. Midland Credit Mgmt., Inc., 964 F.3d 990 (11th Cir. 2020). In two cases consolidated on appeal, consumers alleged violations of § 1692e and § 1692f caused by inadequate time-barred debt disclosures. The majority concluded that the consumers did not satisfy the injury-in-fact requirement of standing where they did not allege that they were personally misled and remanded the cases for dismissal. One judge, concurring in part and dissenting in part, found that the consumers in both of the consolidated cases satisfied the concreteness element of the injury-in-fact requirement but that only one of the consumers satisfied the particularity element.

Appellate Decisions on FDCPA Coverage

Coverage for Debt Buyers: McAdory v. M.N.S. & Assocs., L.L.C., 952 F.3d 1089 (9th Cir. 2020), cert. denied, 20-376 (U.S. Oct. 19, 2020). Overturning the lower court’s dismissal of the consumer’s FDCPA claims against the debt buyer, the majority agreed with the Third Circuit that “an entity that otherwise meets the ‘principal purpose’ definition of debt collector cannot avoid liability under the FDCPA merely by hiring a third party to perform its debt collection activities.” Here the consumer’s allegations that “DNF’s principal purpose was to buy consumer debts in order to collect on them, and that this is how DNF generated most or all of its income” were sufficient to survive dismissal.

Coverage for Debt Buyers: Reygadas v. DNF Assocs., L.L.C., ___ F.3d ___, 2020 WL 7329111 (8th Cir. Dec. 14, 2020). Affirming the district court, the Eighth Circuit held that the debt buyer was a debt collector under the § 1692a(6)’s principal purpose definition. The fact that the debt buyer hired debt collection agencies and law firms to collect the debts it purchased did not shield it from coverage. Reversing summary judgment for the consumer, the Eighth Circuit remanded the case for a determination of the debt buyer’s direct liability for the actions of the debt collection agency that it hired, which requires the district court to determine if the relationship between the two parties is one of principal-agent.

Coverage of Foreclosures: Barnes v. Routh Crabtree Olsen P.C., 963 F.3d 993 (9th Cir. 2020). The Ninth Circuit held that “[a] judicial foreclosure proceeding is not a form of debt collection when the proceeding does not include a request for a deficiency judgment or some other effort to recover the remaining debt.” The distinction between security-interest enforcement and collecting money is key, not the distinction between judicial and non-judicial foreclosures. The consumer pleaded only an attempt to enforce a security interest and not an attempt to collect money; deficiency judgments are prohibited under the controlling Oregon state law.

Coverage As Debt Collectors: Bates v. Green Farms Condo Ass’n, 958 F.3d 470 (6th Cir. 2020). In a FDCPA case involving a condo management company and management company’s attorney actions in a nonjudicial foreclosure to recover condo fees, the Sixth Circuit held that, since consumers alleged violation of sections other than § 1692f(6), they needed to establish that the defendants met the general definition of debt collector, and the consumer had failed to allege sufficient facts to bring defendants within the principal purpose or regularly collects definition of debt collector.

Exemption for Bona Fide Fiduciary Obligation: Darrisaw v. Pennsylvania Higher Educ. Assistance Agency, 949 F.3d 1302 (11th Cir. 2020). The Eleventh Circuit held that the Pennsylvania Higher Education Assistance Agency, a guaranty agency for federal student loans, was exempt from the FDCPA definition of debt collector under the § 1692a(6)(F)(i) exception for collection “incidental to a bona fide fiduciary obligation.”

Exemption for Bona Fide Fiduciary Obligation: Lima v. United States Dep’t of Educ., 947 F.3d 1122 (9th Cir. 2020). The Ninth Circuit held that Educational Credit Management Corporation (ECMC) qualified as a “debt collector” under § 1692a(6)’s “regularly collects” prong because the money is owed to the United States Treasury, meaning that the it was not collecting the debt for its “own account” even though it had title to the judgment against the consumer. However, ECMC was exempted from the definition of debt collector under the § 1692a(6)(F)(i) exception for collection “incidental to a bona fide fiduciary obligation.” ECMC has a fiduciary obligation to the Department of Education which was “incidental” because the collector “had a broader role than merely collecting a debt.”

What Is a Debt? Calogero v. Shows, Cali & Walsh, L.L.P., 970 F.3d 576 (5th Cir. 2020). Consumer alleged FDCPA violations relating to collector’s attempt to recover alleged overpayments for state grant for home repairs after hurricanes Katrina and Rita. The court applied a three-part test from St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., 898 F.3d 351, 360 (3d Cir. 2018) to find the alleged overpayment qualifies as a debt under § 1692a(5). The consumer’s “obligation of repayment for excess grant money arises from a ‘transaction,’ which encompasses consensual agreements and negotiations.” Second, the consumer received funds in exchange for contractual obligations and this was “a classic pro tanto exchange.” Third, the parties did not dispute that the grant money was for “personal, family, or household” purposes.

What Is a Debt? Spiegel v. Kim, 952 F.3d 844 (7th Cir. 2020), cert. denied, 20-121 (U.S. Oct. 5, 2020). A homeowners’ association in a state court recovered $700,000 against Spiegel, a former board member and resident, for wrongdoing and taking actions that exceeded his authority as a board member. While this state court litigation was ongoing, Spiegel sued Kim, the association’s lawyer, alleging that Kim’s application in state court for attorney fees constituted an unfair debt collection practice under the FDCPA. The Seventh Circuit found that the FDCPA did not apply, as the attorney fees were not a “debt” under § 1692a(5)—they “arose out of his alleged wrongdoings as a board member, not from a consensual consumer transaction within the meaning of the FDCPA.”

Appellate Decisions on FDCPA Violations

Communication About Interest: Gomez v. Cavalry Portfolio Servs., L.L.C., 962 F.3d 963 (7th Cir. 2020). The Seventh Circuit held that the verification letter did not violate § 1692e or § 1692e(2) because the letter would not have misled a competent lawyer when it included $1600 for interest allegedly accrued between the bank’s write-off and the debt buyer’s purchase. While this interest charge might be impermissible, the court concluded that it was not “‘false’ or ‘misleading’ to seek any amount greater than a court eventually finds to be due . . . [because a] statement is false, or not, when made.”

Communication About Interest: Pettaway v. National Recovery Sols., L.L.C., 955 F.3d 299 (2d Cir. 2020). A collection letter that stated that the amount of the debt may increase due to “interest, late charges, and other charges that may vary from day to day” was not deceptive, even though the consumer asserted that the addition of late charges and other charges were impossible and that the debt collector did not previously charge interest or intend to do so in the future. The Second Circuit did not address the alleged impossibility of late charges or other charges, but noted that there were no allegations that interest could not accrue and the mere possibility of such interest was consistent with the word “may” in the letter. The letter’s statement that “interest may accrue” was not threatening language prohibited by § 1692e(5).

Communication About Interest: Salinas v. R.A. Rogers, Inc., 952 F.3d 680 (5th Cir. 2020). The consumer received a collection letter listing interest and fees as $0.00 but noting that “[i]n the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice.” The consumer alleged a § 1692e violation because the collector did not collect interest or fees on this type of debt and that the underlying agreement did not allow for interest or fees to be added. The Fifth Circuit concluded that this statement was not false, deceptive, or misleading because “it merely expresses a common-sense truism about borrowing—if interest is accruing on a debt, then the amount due may go up.”

Communication About Interest: Degroot v. Client Servs., Inc., 977 F.3d 656 (7th Cir. 2020). Affirming the district court’s dismissal of consumer’s § 1692e and § 1692g claims, the Seventh Circuit held that “[t]he use of an itemized breakdown accompanied by zero balances would not confuse or mislead the reasonable unsophisticated consumer.” The court also concluded that the debt collector did not violate § 1692e when its letter stated “Please note that no interest will be added to your account balance through the course of Client Services, Inc. collection efforts concerning your account” because “where a dunning letter only makes explicit representations about the present that are true, a plaintiff may not establish liability on the basis that it leaves ambiguity about the future.”

Consumer’s Oral Dispute: Riccio v. Sentry Credit, Inc., 954 F.3d 582 (3d Cir. 2020) (en banc). Overruling its prior decision in Graziano, the Third Circuit, in a unanimous en banc opinion, joined seven other circuits holding that § 1692g(a)(3) does not require consumers to make written disputes. Accordingly, the validation notice from the debt collector did not violate § 1692g(a)(3) by permitting oral disputes.

Identity of the Creditor:Bryan v. Credit Control, L.L.C., 954 F.3d 576 (2d Cir. 2020). The Second Circuit held that the consumer plausibly pleaded a cause of action pursuant to § 1692g(a)(2) where the collector listed Kohl’s Department Stores as the debt collector’s “client” and Chase Bank as the “original credit grantor” in the validation notice without identifying Capital One as the creditor. That Kohl’s participated in the credit card program and servicing the accounts did “not necessarily convert Kohl’s into a creditor, and certainly not into the creditor to whom the debt is owed.” As to the consumer’s § 1692e claim that it was deceptive, the erroneous identification of the creditor was not necessarily materially misleading to the least sophisticated consumer.

Identity of the Creditor: Steffek v. Client Servs., Inc., 948 F.3d 761 (7th Cir. 2020). Seventh Circuit concluded that the collector violated § 1692g(a)(2) by failing to identify clearly “the name of the creditor to whom the debt is owed” in a collection letter that stated “RE: CHASE BANK USA, N.A.” followed by an account number. The letter failed to identify the current creditor to unsophisticated consumers because “[t]he mere presence of the correct name in the notice somewhere does not suffice.”

FDCPA Claims Related to Credit Reporting: Johnson v. Enhanced Recovery Co., L.L.C., 961 F.3d 975 (7th Cir. 2020). Consumer alleged that a dunning letter violated § 1692e by stating that an account that had already been reported to credit bureaus “may be reported” and that payment of the offered settlement amount would stop collection, arguing that this implied future reporting and that there would be no credit reporting if consumer paid by the deadline specified for settlement. The Seventh Circuit found these claims were not “so implausible” that the case should be resolved on the pleadings. Nor should the case be dismissed because the collector complied with model language in Fair Credit Reporting Act Regulation V—this did not eliminate the factual question whether the consumer stated an FDCPA claim. The consumer had the “burden of producing evidence of confusion . . . using an objective measure such as ‘a carefully designed and conducted consumer survey.’” Since the consumer failed to produce such evidence, the court affirmed summary judgment for the debt collector.

FDCPA Claims Related to Credit Reporting: Zablocki v. Merchants Credit Guide Co., 968 F.3d 620 (7th Cir. 2020). The Seventh Circuit held that separately reporting different medical debts all owed to the same provider, instead of aggregating them when reporting to the credit bureaus, was not unfair or unconscionable under § 1692f.

Collection of a Time-Barred Debt: Manuel v. Merchants & Prof'l Bureau, Inc., 956 F.3d 822 (5th Cir. 2020). The Fifth Circuit reserved for another day whether a letter is misleading as a matter of law if it lacks warnings that the debt is not judicially enforceable or could be revived by a partial payment. Instead, it concluded that taken “as a whole” four collection letters received after the debt was time-barred would mislead an unsophisticated consumer to believe that the debt is legally enforceable where the letters: (1) do not state when the debt was incurred and give no warning that the debt might be too old to be legally enforceable; (2) contain language suggesting a special deal that will expire soon even though there was nothing urgent about the old debt; and (3) contain vague threats about additional collection efforts.

Items Visible on the Collector’s Envelope: Cagayat v. United Collection Bureau, Inc., 952 F.3d 749 (6th Cir. 2020). The Sixth Circuit found that the consumer stated a claim under § 1692f(8) by alleging that the words “Collection Bureau” bled through the debt collection letter’s “inward side of the paper page” and was visible in the envelope’s glassine window. “A narrow construction of § 1692f(8) would create absurd results by allowing debt collectors to print whatever they want on the inside of the letter, no matter how obvious from the outside, as long as they do not print it on the envelope.” The dissenting judge thought this would lead to bizarre results given that the words “Collection Bureau” were part of the debt collector’s name, which it was required to include in the letter.

Items Visible on the Collector’s Envelope: Donovan v. FirstCredit, Inc., ___ F.3d ___, 2020 WL 7414643 (6th Cir. Dec. 18, 2020). Consumer had standing to pursue a § 1692f(8) claim where she alleged that writing visible through a glassine window in the envelope created a risk of disclosure that someone would identify this as a collection communication. The Sixth Circuit found that this risk implicates the FDCPA’s core concern about invasion of privacy and that such concerns were sufficiently concrete because they were traditionally regarded as the basis for lawsuits in English or American courts. The claim was particularized and actual since the letter was addressed to the consumer and sent from the debt collector. Reversing judgment on the pleadings for the debt collector, the Sixth Circuit held that the consumer plausibly alleged a violation of § 1692f(8) caused by language visible through a glassine window in an envelope. The court rejected the debt collector’s argument that there is a “benign language” exception to § 1692f(8).

Items Visible on the Collector’s Envelope: Preston v. Midland Credit Mgmt., Inc., 948 F.3d 772 (7th Cir. 2020). Rejecting the collector’s argument for a benign-language exception, the Seventh Circuit found the consumer’s § 1692f(8) claim could proceed based on the envelope language “TIME SENSITIVE DOCUMENT.” The statutory language was clear so there was no need to not consult legislative history or agency interpretation.

Settlement Language: Preston v. Midland Credit Mgmt., Inc., 948 F.3d 772 (7th Cir. 2020). The Seventh Circuit affirmed dismissal of the consumer’s § 1692e(2)(A) and § 1692e(10) claims because the collector used the safe harbor language in Evory v. RJM Acquisitions Funding, L.L.C., 505 F.3d 769 (7th Cir. 2007): “We are not obligated to renew any offers provided.” Neither the use of the words “TIME SENSITIVE DOCUMENT” on the envelope nor the location of the safe harbor, which was on the face of the letter in the same size and font as the other text, negated the effect of the safe harbor language. A concurring judge urged the court to amend the safe harbor to say, “we may, but are not obligated to, renew this offer,” if presented with an opportunity in a future case. The court also affirmed dismissal of the consumer’s § 1692e claim, concluding that unsophisticated consumers would not be misled by the collection letter’s discounted payment offers.

Present Right to Possession Under § 1692f(6): Richards v. PAR, Inc., 954 F.3d 965 (7th Cir. 2020), cert. denied, 20-383 (U.S. Nov. 2, 2020). The Seventh Circuit found “Whether a repossessor had a ‘present right to possession’ for purposes of § 1692f(6)(A) can be determined only by reference to state law. Based on the evidentiary record, a reasonable jury could find that the towing company employees did not have a present right under Indiana law to possess Richards’s vehicle when they seized it. Accordingly, she has a viable FDCPA claim.”

Appellate Decision on Relationship of Bankruptcy to the FDCPA

Distinguishing Walls: Manikan v. Peters & Freedman, L.L.P., ___ F.3d ___, 2020 WL 6938318 (9th Cir. Nov. 25, 2020). The Ninth Circuit reversed and remanded the district court’s decision granting summary judgment to the debt collector where the consumer’s claims under § 1692d, § 1692e, and § 1692f were based on efforts to collect a debt that had already been paid through a chapter 13 bankruptcy. The court distinguished the case from Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002), which involved collection of a debt discharged in bankruptcy, from the facts in this case, where it was undisputed that the debt was paid in full prior to a bankruptcy discharge. Since the consumer in this case did not seek to remedy the violation of a discharge order, he was entitled to pursue FDCPA claims that were not “inextricably intertwined with bankruptcy issues.” The court also stated that its agreement with the Second, Third, and Seventh Circuits that “the Bankruptcy Code did not implicitly repeal the FDCPA.”

Appellate Decisions on Collector Defenses

Statute of Limitations on FDCPA Claim: Bender v. Elmore & Throop, P.C., 963 F.3d 403 (4th Cir. 2020). The Fourth Circuit held that “each violation of the FDCPA gives rise to a separate claim governed by its own limitations period” even if the violation was the same type of violation as an earlier violation that is beyond the FDCPA’s one-year statute of limitations, noting that the Eighth and Tenth Circuits have also concluded that the limitations period runs anew from the date of each violation.

Statute of Limitations on FDCPA Claim: Gomez v. Cavalry Portfolio Servs., L.L.C., 962 F.3d 963 (7th Cir. 2020). The Seventh Circuit concluded that FDCPA claims filed within a year of receiving a verification letter were timely. That the same alleged FDCPA violation occurred in two prior dunning letters received outside the limitations period was irrelevant—each violation carries its own limitations period.

Bona Fide Error Defense: Wagner v. Chiari & Ilecki, L.L.P., 973 F.3d 154 (2d Cir. 2020). Consumer alleged FDCPA violations stemming from repeated post-judgment collection efforts against the wrong consumer. The Second Circuit found a reasonable jury could find that the bona fide error defense did not apply to §§ 1692e, 1692e(2), and 1692e(10) claims—the error was not bona fide since post-judgment collection continued after the collector was informed it had the wrong consumer and the collector did not maintain reasonable procedures to avoid its error where it had no written policies to cover the situation. The Second Circuit affirmed summary judgment for the collector on the § 1692e(5) claim because the debt collector had “unintentionally sent otherwise valid and lawful debt collection communications to a non-debtor” and on the § 1692f claim, finding no bad faith or abuse since the consumer was not forced to attend the debtor’s exam or respond to the informational subpoena and the collector agreed to hold the subpoena in abeyance.

Bona Fide Error Defense: Urbina v. National Bus. Factors Inc., 979 F.3d 758 (9th Cir. 2020). Reversing summary judgment for the debt collector, the Ninth Circuit held that “the FDCPA’s bona fide error defense does not allow debt collectors to avoid liability by contractually obligating creditor-clients to provide accurate information, nor by requesting that creditor-clients provide notice of any errors in the accounts assigned for collection without waiting to receive a response before instituting collection efforts.”

Rooker-Feldman: Van Hoven v. Buckles & Buckles, P.L.C., 947 F.3d 889 (6th Cir. 2020). The Sixth Circuit rejected a Rooker-Feldman defense where the FDCPA claims were based on the addition to the amount due of filing fees for writs of garnishment, not the writs of garnishment themselves. In Michigan a writ of garnishment is not a judgment and Rooker-Feldman does not apply to court clerks’ “ministerial” actions.

Rooker-Feldman: VanderKodde v. Mary Jane M. Elliott, P.C., 951 F.3d 397 (6th Cir. 2020). The Sixth Circuit held the Rooker-Feldman doctrine did not apply to § 1692e claim that collector added excessive post-judgment interest. As discussed in Van Hoven v. Buckles & Buckles, supra, the writs of garnishment were not state court judgments and the consumer’s complaint targeted defendant’s action in calculating the post judgment interest for garnishment, not the judgment itself.

Waiver: McClain v. Hanna, 949 F.3d 266 (6th Cir. 2020). Consumer waived any interest in class claims under the FDCPA by entering into a settlement agreement that awarded him judgment on “all counts.” As a result, he could not pursue the class claims on appeal.

Compelling Arbitration: Barbosa v. Midland Credit Mgmt., Inc., ___ F.3d ___, 2020 WL 6939627 (1st Cir. Nov. 25, 2020). The First Circuit affirmed the lower court’s decision to compel the consumer to arbitrate her FDCPA claims against debt buyer and collection law firm defendants. The court held that, although they were not signatories to the cardmember agreement containing the arbitration clause, both the debt buyer and the collection attorney were entitled to enforce the terms of that agreement.

Appellate Dccisions on Attorney Fees and Costs

Costs: Peck v. IMC Credit Servs., 960 F.3d 972 (7th Cir. 2020). Seventh Circuit ruled that pro se consumer could not recover costs since “costs” in § 1692k(a)(3) refers to “costs” awardable under Fed. R. Civ. P. 54(d), not damages or compensation for the pro se consumer’s time or mailing expenses.

Attorney Fees for a FDCPA Defendant: Tejero v. Portfolio Recovery Assocs., L.L.C., 955 F.3d 453 (5th Cir. 2020). The Fifth Circuit found that Rule 11 sanctions were not appropriate against the consumer’s attorneys based on the attorneys’ failure to make a settlement offer when impermissibly ordered by the district court or their decision to file summary judgment rather than settle a claim. Similarly, not appropriate was an order that the consumer’s attorneys pay an award to the defendant’s attorneys under § 1692k(a)(3), since their claims were not brought in bad faith and § 1692k(a)(3) “permits fee awards only against parties, not against their counsel,” which would be contrary to common law and not specifically allowed by the FDCPA. The Fifth Circuit rejected the consumer’s request to order the recusal of the district court judge, who had complained to state bar authorities that the consumer’s counsel had orchestrated a scheme to abuse the FDCPA.

Appellate Decision on Certification of an FDCPA Class

Flecha v. Medicredit, Inc., 946 F.3d 762 (5th Cir. 2020). Reversing class certification, the court held that the class representative failed to carry her burden to demonstrate commonality because she did not present evidence that the collector’s threat to sue was false, and thus in violation of § 1692e(5).

Author Name: 
April Kuehnhoff
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April Kuehnhoff is a staff attorney in the National Consumer Law Center’s Boston office, where she advocates for fair debt collection. She is the co-author of NCLC’s Fair Debt Collection and a contributing author to Surviving Debt. Prior to joining NCLC, Ms. Kuehnhoff was an associate at Shapiro Haber & Urmy LLP, a law clerk for the Honorable Justice Gary Katzmann at the Massachusetts Appeals Court, and a Skirnick Public Interest Fellow at the Cambridge and Somerville Legal Services office of Greater Boston Legal Services. She is a graduate of Wellesley College and Harvard Law School.

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