Third Circuit Disagrees with Ninth Circuit — Says Communications Between Counsel Subject to FDCPA

In Allen v. LaSalle Bank, — F.3d – (3d Cir. 2011), here, the Court of Appeals for the Third Circuit disagreed with the Ninth Circuit’s decision in Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934-39 (9th Cir. 2007) and found inter-counsel communications are subject to the FDCPA, explaining: 

As noted above, the issue here is whether § 1692f(1) governs communications from a debt collector to a consumer?s attorney, such as FSKS?s letters to Allen?s attorney. The attorney for FSKS conceded at oral argument that there is nothing in the FDCPA that explicitly exempts communications to an attorney. Unquestionably, the scope of the FDCPA is broad. Indeed, § 1692f(1) prohibits “unfair or unconscionable means,” regardless of the person to whom the communication was directed. The FDCPA similarly defines a “communication” expansively. A communication to a consumer?s attorney is undoubtedly an indirect communication to the consumer. Evory, 505 F.3d at 773 (quoting § 1692a(2)); see also Sayyed, 485 F.3d at 232-33.6.  The FDCPA is a strict liability statute to the extent it imposes liability without proof of an intentional violation.  See § 1692k. If an otherwise improper communication would escape FDCPA liability simply because that communication was directed to a consumer?s attorney, it would undermine the deterrent effect of strict liability.

The Court of Appeals also held that the state-law litigation privilege can not bar a federal claim, explaining:

New Jersey?s litigation privilege applies to “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” Hawkins v. Harris, 661 A.2d 284, 289 (N.J. 1995) (internal quotations and citations omitted). FSKS?s letters here undoubtedly fall within this definition. Nonetheless, the FDCPA does not contain an exemption from liability for common law privileges. “[C]ommon law immunities cannot trump the [FDCPA]?s clear application to the litigating activities of attorneys,” Sayyed, 485 F.3d at 231, and, like the Fourth Circuit, we will not “disregard the statutory text in order to imply some sort of common law privilege,” id. at 229; see also Hartman v. Great Seneca Fin. Corp., 569 F.3d 606, 615-17 (6th Cir. 2009). The application of the New Jersey litigation privilege does not absolve a debt collector from liability under the FDCPA.