Sunday, April 11, 2010

FYI: 11th Cir Says Failure to Register in State Not Per Se Violation of FDCPA

The U.S. Court of Appeals for the Eleventh Circuit recently held that a debt collector's failure to register under state law was not a per se violation of the FDCPA, but reversed and remanded for consideration by a jury a district court's summary judgment ruling in favor of a consumer on his claims against a debt collector under Sections 1692e(5) and 1692f of the FDCPA.  A copy of the opinion is attached.

Defendant, a partnership in the business of purchasing and collecting consumer debt, purchased Plaintiff's charged off credit card debt and subsequently sent Plaintiff a letter informing him that it had purchased the debt, gave details about the debt, and advised Plaintiff that he had thirty days to dispute the debt.  Plaintiff did not respond to the letter and Defendant filed suit in state court to collect the debt.  Plaintiff then initiated this federal cause of action alleging violations of the FDCPA and Florida's Consumer Collection Practices Act (the "Florida CCPA"). The district court granted Defendant's motion on all of the Florida CCPA claims and granted Plaintiff partial summary judgment under Sections 1692e(5) and 1692f of the FDCPA, finding that, because neither Defendant nor its general partners were registered as "consumer collection agencies" with the State of Florida, as required by the Florida CCPA, Defendant violated the Sections 1692e(5) and 1692f of the FDCPA.

In ultimately reversing and remanding the district court's decision, the 11th Circuit as a matter of first impression affirmed the district court's holding that a violation of the Florida CCPA for failure to register may support a federal cause of action under the FDCPA.  The Court noted that a violation of the Florida CCPA was not a per se violation of the FDCPA, as the conduct or communication at issue must also violate the relevant provision of the FDCPA.  Accordingly, the Court then analyzed whether Defendant had violated either § 1692e(5) or § 1692(f) of the FDCPA, as claimed by Plaintiff.  Section 1692e(5) of the FDCPA prohibits a debt collector from "threatening to take action that cannot legally be taken or that is not intended to be taken."  The Court held that reasonable jurors applying the 'least-sophisticated consumer' standard could disagree as to whether Defendant's letter "threatened" Plaintiff, and therefore the issue was one for a finder of fact.

The Court next addressed Plaintiff's claims under § 1692f of the FDCPA which prohibits a debt collector from "using unfair or unconscionable means to collect or attempt to collect any debt." The Court found that these claims depended in part on a trier of fact's finding as to Plaintiff's §1692(e)(5) claims, and accordingly, that remand was required.

Let me know if you have any questions.  Thanks.


Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

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