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Unfair and Deceptive Acts and Practices: 11.9.2.4 First Amendment and Other Issues in Defamation Claims by Dealers

News media perform an important public service when they publicize information about consumer fraud. When a dealer who is the subject of such a report sues for defamation, First Amendment issues may arise. The United States Supreme Court has held that a libel plaintiff who is a public figure must show that a news media defendant acted with actual malice.1433 Even persons who are not public figures may have to show actual malice if they voluntarily thrust themselves into the vortex of a public issue.

Unfair and Deceptive Acts and Practices: 11.9.4.2 Self-Incrimination and the Right to Confront Witnesses

While a corporate seller accused of fraudulent business practices may also be subject to criminal prosecution, corporations are not protected by the privilege against self-incrimination, so may not invoke the right to withhold evidence in a civil UDAP action.1473 An individual may invoke the Fifth Amendment right to withhold evidence, but the court may have the authority to compel the testimony upon issuing a protective order against its use in a criminal proceeding.1474 In the alternative,

Unfair and Deceptive Acts and Practices: 11.9.4.3 Due Process and Other Challenges to UDAP Enforcement Procedures

Courts have rejected arguments that state UDAP enforcement actions are based on arbitrary or discriminatory enforcement.1477 A defendant in a civil UDAP enforcement action does not have a due process right to appointed counsel.1478 There may, however, be a right to counsel when the state seeks imprisonment of a defendant in a contempt proceeding for violation of a UDAP injunction.1479

Unfair and Deceptive Acts and Practices: 11.9.5 Other Constitutional Challenges

Sellers have been uniformly unsuccessful in challenging UDAP regulations as invalid delegations of legislative authority1484 or as improper exercises of statutory authority by the state attorney general or other rule-making agency.1485 Many decisions reject claims that UDAP statutes or regulations violate equal protection rights.1486 UDAP statutes awarding attorney fees and costs to one side but not the other do not violate the Equal Protecti

Fair Debt Collection: 11.4.2.3 Bringing a Class Action Seeking Declaratory or Injunctive Relief

Limiting class relief to declaratory or injunctive relief, where available under either the FDCPA or state law,234 may be the best choice in some cases, such as actions against undercapitalized, rogue debt collectors.235 The proof needed to establish a class-wide declaratory judgment is likely to be much the same as the proof needed to obtain a monetary recovery for an individual plaintiff, thus requiring few additional resources.

Fair Debt Collection: 11.4.3 A Wide Range of Parties May Bring FDCPA Actions

A private right of action is available not only to the “consumer,” that is, the putative debtor, but also, in some cases, to “any person” adversely affected by an FDCPA violation.239 Moreover, most FDCPA provisions protect not just consumers, but any person affected by violations occurring during the collection of consumer debts.

Fair Debt Collection: 11.4.4.2 Owners, Partners, Franchisors, and Parent Companies

Apart from the possibility of direct liability for those who meet the definition of “debt collector,”255 the owner of a collection agency may be held vicariously liable for FDCPA violations committed by agency employees if there is sufficient evidence to pierce the corporate veil.256 The applicable state law to evaluate piercing the corporate veil is the state of incorporation of the entity whose veil is sought to be pierced.257 Seeking to pierce t

Fair Debt Collection: 11.4.4.3 Collection Attorneys and Collectors Employing Attorneys

Collection attorneys, originally broadly excluded from FDCPA coverage, are now subject to the Act’s provisions and to private FDCPA actions, as any other debt collector would be.265 Suing a collection agency’s attorney may provide deeper pockets than suing a collection agency. If a law partner is liable under the FDCPA, the partnership may also be liable under state partnership principles.266 However, some judges may react badly to suits against collection attorneys.

Fair Debt Collection: 11.4.4.4 Forms Suppliers, Repossessors, and Insurers

It is an FDCPA violation to design, compile, and furnish any form while knowing that the form will be used to create the false impression that a person other than the creditor (such as an attorney or a collection agency) is participating in the collection of the debt.274 An example of this conduct is someone who sends a default letter to a debtor portraying themselves as a debt collector when they actually have no involvement in the debt collection effort.

Fair Debt Collection: 11.4.4.5 Creditors

Creditors who, in the process of collecting their own debts, use any name other than their own which would indicate a third party is collecting the debt are subject to the FDCPA.284 Generally, however, creditors collecting under their own name are exempt from FDCPA coverage for their own debt collection activities, but a state claim usually is available to challenge a creditor’s misconduct.

Fair Debt Collection: 11.4.5.1 Right to a Jury Trial

The Seventh Amendment to the United States Constitution guarantees the right to a jury trial in FDCPA private actions seeking actual or statutory damages.296 Collectors have argued that the use of the word “court” in 15 U.S.C. §§ 1692k(a)(2)(A) and 1692k(b)(1) evidenced a congressional intent to limit FDCPA actions to bench trials.

Fair Debt Collection: 11.4.5.2 Benefit of a Jury Trial

Generally, debtors should request jury trials at the beginning of debt collection harassment cases. This is such a strong preference that differences among courts as to the makeup, procedures, and delay in obtaining a jury may dictate the debtor’s choice of forum.

Fair Debt Collection: 11.4.5.3 Preparing for a Jury Trial of an FDCPA Case

In federal court, where cases pursuant to the Fair Debt Collection Practices Act are usually brought, a demand for trial by jury must be made “not later than [ten] days after the service of the last pleading.”304 The better practice is to request a trial by jury in the consumer’s complaint. The method of requesting a jury trial, for example, by doing so in the caption, is often governed by local rules.

Fair Debt Collection: 11.5.1 First Steps

One important first step in developing a case for debtor harassment is preparing a chronology of the events involved in the harassment. Events seemingly insignificant to the claim may prove significant later, may aid a witness’s memory, or may indicate discrepancies in evidence. It can also be helpful in establishing a client’s credibility in front of a judge or jury.

There are usually a substantial number of documents connected with a consumer transaction; these are particularly useful for pinpointing significant dates in a chronology.

Fair Debt Collection: 11.5.2.3 Is It Ethical for the Consumer’s Attorney to Suggest or Assist in the Recording?

While it may be legal in many states for a consumer to record a collector’s call, a separate question is whether it is ethical for the consumer’s attorney to participate in, assist, or even suggest that the call be recorded. ABA Opinion 337 (1974) initially held that recording without consent was conduct involving fraud, dishonesty, or misrepresentation, prohibited by ABA Ethical Rule 8.4,339 but that rule was reversed in June 2001 by ABA Formal Opinion 01-422.