District Court (Ala.) Says FDCPA Claim Arising from Filing Proofs of Claim on Expired Debt Remained a “Core” Bankruptcy Proceeding under Crawford

In Slaughter v. LVNV Funding, LLC, 2015 WL 627954 (N.D.Ala. 2015), Judge Bowdre found that an FDCPA claim arising from the defendant’s filing Proofs of Claim on expired debt remained a “core” proceding under Crawford and the reference to the bankruptcy court should not be withdrawn

Given the court’s determination that the FDCPA claim is inextricably related to the bankruptcy proceeding, two additional factors guide the court’s determination that withdrawal of the bankruptcy reference at this point would not promote the economical use of the parties’ resources, facilitate the bankruptcy process, or be an efficient use of judicial resources. First, LVNV is in the process of filing a petition for certiorari to the United States Supreme Court on the Crawford decision. Presumably, LVNV will file motions to stay the proceedings in all of its pending cases with the same underlying issues awaiting a decision by the Supreme Court, as it has done in the Crawford case in the Middle District. See Crawford, No. 12–AP–3033–DHW (M.D.AL.), docs. 38, 42 (LVNV’s motion to stay and the court’s order granting the same). Second, a putative class action exists in the United States District Court for the Southern District of Alabama, which claims to represent a class defined as all consumers in the United States who filed Chapter 13 bankruptcy in which LVNV filed one or more proofs of claim for a debt that was barred by the statute of limitations. Brock v. Resurgent Capital Services, LP, and LVNV Funding, LLC, Case No. 1:14–cv–00324–WS–M (S.D.AL.). LVNV has already filed numerous motions to stay in the bankruptcy courts across this state until the class is certified, and plaintiffs have an opportunity to opt out of the Brock Class Action. Given the numerous filings throughout the Alabama bankruptcy courts, in cases with identical claims, the court finds that leaving the bankruptcy reference in place will advance the uniformity in bankruptcy administration, decrease con-fusion, promote the economical use of the parties’ resources, and facilitate the bankruptcy process.