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Fair Debt Collection: 11.5.4.5 Protective Orders

The parties may agree to a confidentiality or protective order at the beginning of discovery to eliminate objections based on confidentiality.460 Some courts have a form confidentiality order available on their website and specific guidelines about filing such orders.461 A court may enter a protective order limiting the communication of the collector’s trade secrets and proprietary data,462 although there is a strong presumption of public access to

Fair Debt Collection: 11.5.4.6 Additional Discovery Approaches and Issues

Counsel should be aware of impending discovery deadlines in the court’s scheduling order. Most courts require that, absent some excusable circumstance, discovery initiatives must be undertaken so that the response of the opposing party is due prior to the discovery deadline. An extension of the discovery deadline may be necessary to properly follow up on discovery responses and deposition testimony,473 or where the defendant’s motion for summary judgment raises a new factual issue.474

Fair Debt Collection: 11.6.6 Burden of Proof As to FDCPA Exceptions

While the burden of proof is on the consumer asserting that a collector violated an FDCPA provision, the burden switches to the collector seeking to assert that the FDCPA provision does not apply to the collector. The FDCPA explicitly provides that the collector must prove the bona fide error defense “by a preponderance of the evidence.”563

In other situations, the courts must determine where the burden of proof lies. The Third Circuit in an FDCPA case sets out five criteria for shifting the burden of proof to the collector:

Fair Debt Collection: 11.6.2 Proving an FDCPA Violation

As discussed at § 3.2.1, supra, courts most often apply a “least sophisticated” or “unsophisticated” consumer standard to analyze whether a debt collector has violated the FDCPA.515 This means that the standard “pays no attention to the circumstances of the particular debtor in question, and asks only whether the hypothetical

Fair Debt Collection: 11.6.3 Surveys

While comprehensive surveys can provide strong evidence that a particular conduct or communication is deceptive, such surveys are a form of expert testimony,522 so one of the biggest impediments to using survey evidence in FDCPA cases is the high cost of the expert designing and conducting the survey.523 It is not clear whether a consumer who conducts a survey to establish an FDCPA claim may recover the costs of the survey as part of the damages, the fee award, or costs.

Fair Debt Collection: 11.6.4 Experts

Experts can be used to show deception or confusion in a consumer case, short of a full survey of a sample of the collector’s customers who received the same communication as the plaintiff.538 For example, in the case discussed at § 11.6.3, supra, against a company using the name “Retrieval Masters Creditors Bureau, Inc.,”539

Fair Debt Collection: 11.6.5 Pattern Evidence

While evidence of a pattern of noncompliance within a particular case may be used to determine whether that particular conduct is abusive or harassing,545 evidence of similar wrongdoing by the defendant with other consumers, including other victims’ testimony, may be introduced:

Fair Debt Collection: 11.7.1 Offers of Judgment in General

Rule 68 of the Federal Rules of Civil Procedure provides that, at any time at least fourteen days before trial, the collector may make “an offer to allow judgment on specified terms, with the costs then accrued.” An offer of judgment may be accepted within fourteen days by written notice. Then either party may file the offer and notice of acceptance together with proof of service, after which the clerk enters judgment.576

Fair Debt Collection: 11.7.3 Ambiguity in Defendant’s Offer of Reasonable Attorney Fees

Some debt collectors file offers of judgment which provide for damages and “costs,” but do not specifically mention the payment of the consumer’s attorney fees. The debt collector then asserts that acceptance of the offer of judgment waived the consumer’s right to recover attorney fees. The debt collector’s position is based on litigation under the Civil Rights Act, in which the term “costs” includes the plaintiff’s attorney fees for the purpose of an offer of judgment.

Fair Debt Collection: 11.8.1.1 Importance of Developing Actual Damages

A working knowledge of the law and practice of proving damages is crucial in both the negotiation and the trial stage of a debt collection abuse case. An attorney who has not developed the evidence of damages in a case has little idea of where to start and terminate negotiations.

Fair Debt Collection: 11.8.2.1 Importance of Emotional Distress Damages

Depending on the severity of the harm, damage awards for emotional distress can be substantial.632 For example, in McCollough v. Johnson, Rodenburg & Lauinger, L.L.C.,633 the Ninth Circuit held that the testimony of the plaintiff consumer and a clinical psychologist supported the jury’s award of $250,000 for emotional distress.

Fair Debt Collection: 11.8.2.3 Older State Law Tort Standards for Recovery of Emotional Distress Damages

Courts in the past were reluctant to permit compensation for mental anguish or distress unless the mental distress resulted from a physical injury or impact, known as the “impact rule.” Some courts restricted the availability of compensation for stress-related injuries to situations in which they are likely to exist (for example, when the defendant’s conduct is “outrageous,” “malicious,” or “reckless”).642 Some courts wanted to see utterly despicable debt abuses and “blood” before they would compensate a tort victim.

Fair Debt Collection: 11.8.2.5 Injuries and Symptoms Related to Stress

The consumer’s attorney should ask about the stress the consumer suffered and how long the distress continued. Actual damages from stress may involve several different injuries, such as nausea, sleeplessness, headaches, body pain, and loss of concentration. Multiple symptoms from stress can add credibility to the consumer’s claim, as well as increase actual damages. It can be helpful to obtain medical or mental health treatment records if the consumer discussed the distress with a professional.

Fair Debt Collection: 11.8.6.1 When to Introduce Proof of Damages

Often in FDCPA cases, proof of actual damages is introduced into evidence only after the consumer has prevailed on a partial summary judgment motion on liability. By resolving liability issues first through a partial summary judgment motion, judicial and litigation resources are conserved because proof of actual damages can be focused on those claims on which the consumer prevailed at summary judgment and not on the consumer’s other claims.714

Fair Debt Collection: 11.8.6.2 Proof of Out-of-Pocket Damages

For most forms of out-of-pocket injury, documentation is often the best evidence. For example, medical expenses might be proved by billing statements or a receipt for medication. A paycheck can show the victim’s wages. An employer’s personnel file can show the employer’s view of a change in work habits. A court may even reject the consumer’s testimony about such out-of-pocket expense without supporting documents.715