The U.S. Court of Appeals for the Eighth Circuit recently affirmed the dismissal of federal Fair Debt Collection Practices Act ("FDCPA") allegations that an affiant did not have personal knowledge of the facts and therefore did not know whether the information in the affidavit was true or not.
In so ruling, the Court held that, absent allegations of actual false statements, the plaintiff debtor had not plausibly alleged that the debt collector misled the state court in any meaningful way.
A copy of the opinion is available at: Link to Opinion
The plaintiff debtor was sued by his landlord in Missouri state court for unpaid rent. The law firm retained by the landlord (the "Debt Collector") filed an affidavit with the complaint, signed by a lawyer in the Debt Collector firm as affiant, which recited information received from the landlord. After a trial, judgment was entered against plaintiff debtor.
The plaintiff debtor subsequently sued the Debt Collector, alleging the Debt Collector violated the FDCPA when its attorney swore to an affidavit in the state court collection action without personal knowledge of the facts. The plaintiff did not allege that the substantive information contained in the affidavit regarding the debt was false. The Debt Collector filed a motion to dismiss, which was granted.
On appeal, the Eighth Circuit first held that that the FDCPA action was not directed at or attacking the state court judgment, and therefore that the Court was not deprived of jurisdiction under the Rooker-Feldman doctrine.
The plaintiff debtor argued the Debt Collector violated the FDCPA because its attorney did not have personal knowledge of the facts and, therefore, did not know whether the information in the affidavit was true or not. The plaintiff debtor claimed that the filing of the affidavit was a "false, deceptive, or misleading representation" made in connection with collection of a debt in violation of 15 U.S.C. § 1692e, and that it used "unfair or unconscionable means" to collect a debt in violation of 15 U.S.C. § 1692f.
The Eighth Circuit noted that, although the plaintiff debtor alleged that the Debt Collector violated both 15 U.S.C. §§ 1692e and 1692f by swearing to the truth of the affidavit without having personal knowledge of the facts contained within it, the plaintiff debtor did not allege that the Debt Collector's attestation was literally false.
Instead, the Court noted, the plaintiff debtor alleged that the Debt Collector swore to the truth of the allegations in affidavits when in fact they did "not know whether the allegations are true or not." For example, the Court noted, the plaintiff debtor did not allege that the Debt Collector swore to facts it knew to be false, nor that the plaintiff debtor did not actually rent the property or owe rent.
The Eighth Circuit held that, even if the Debt Collector's attestation were literally false, the plaintiff debtor had not plausibly alleged that he or anyone else was misled by that falsehood.
As the Court noted, courts have rejected claims that a debt collector violated §§ 1692e and 1692f with its litigation activity, in part because no one "was misled, deceived, or otherwise duped" by the contested court filings. See, e.g., Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d 814, 819 (8th Cir. 2012) quoting O'Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938, 945 (7th Cir. 2011).
The Eighth Circuit referenced the concurring opinion in O'Rourke, a Seventh Circuit case, which explained that courts link "false to misleading," meaning "[i]f a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA - even if it is false in some technical sense." O'Rourke, 635 F.3d at 945.
Thus, the Eighth Circuit held that, absent allegations of actually or literally false statements (e.g., here, an allegation that the plaintiff debtor actually did not owe rent), the plaintiff debtor had not plausibly alleged that the Debt Collector misled the state court in any meaningful way. Instead, the Eighth Circuit held, the plaintiff debtor's complaint indicated that a trial was had in which the state court received evidence before rendering a judgment on the underlying rent issue.
Therefore, the Eighth Circuit held that the plaintiff debtor did not allege a plausible violation of the FDCPA, and that his claims were properly dismissed.
Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: rwutscher@MauriceWutscher.com
Admitted to practice law in Illinois
California | Florida | Illinois | Indiana | Massachusetts | New Jersey | New York | Ohio | Pennsylvania | Texas | Washington, DC
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates and webinar presentations are available on the internet, in searchable format, at:
Financial Services Law Updates
and
The Consumer Financial Services Blog™
and
and
California Finance Law Developments
and
