District Court (Pa.) Affirms Rule that Creditor Can Not Be Brought Under FDPCA Through Vicarious Liability, But Guts Rule By Allowing Civil Conspiracy Claim

In Combs v. NCO Financial Systems, Inc., 2011 WL 1288686 (E.D.Pa. 2011), Judge Yohn affirmed the rule that a creditor, otherwise exempt from the FDCPA, can not be brought under its auspices through the doctrine of vicarious liability, explaining:

In response to Capital One’s motion, plaintiff does not explicitly contest or concede that Capital One is not a “debt collector” within the meaning of the FDCPA. Instead, plaintiff simply argues that Capital One is “vicariously liable under the FDCPA.” (Pl.’s Resp. 5.) To be vicariously liable under the FDCPA, however, one must still be a “debt collector.” See Pollice, 225 F.3d at 405 (an entity which itself meets the definition of a “debt collector” may be held vicariously liable under the FDCPA); see also, e.g., Gary v. Goldman & Co., 180 F.Supp.2d 668, 673 (E.D.Pa.2002) (defendant not vicariously liable because not itself a “debt collector”); Martin v. United Recovery Sys., LP, No. 07–1120, 2007 U.S. Dist. LEXIS 86109, at *7 (M.D.Pa. Nov. 21, 2007) (“[C]reditors may not be held vicariously liable under the FDCPA.”) (citations omitted).

But, Judge Yohn then gutted the rule by allowing a claim of civil conspiracy to proceed:

The complaint describes with specificity a course of conduct that, plaintiff claims, constitutes illegal debt collection activities in violation of the FDCPA,FN7 and acts taken in furtherance thereof by both NCO and Capital One. Plaintiff charges that defendants “entered into an agreement under which [they] agreed to willfully or knowingly violate the FDCPA,” and that the specific debt collection activities alleged in the complaint were carried out pursuant to that agreement. (Compl.¶¶ 42, 45.)  Most of plaintiff’s specific allegations describe conduct by NCO. However, plaintiff also describes correspondence from Capital One regarding the Debt and the related collection efforts. Among this correspondence is a letter from Capital One that directed plaintiff to call a telephone number; although the automated message played upon calling the number identified Capital One, plaintiff ended up reaching NCO. (Compl.¶¶ 25–26.) This allegation in particular is suggestive of concerted action, and the allegations as a whole make clear the object of the alleged conspiracy and describe various acts taken in furtherance thereof. They also supply adequate factual support for each element of plaintiff’s claim for civil conspiracy.