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CEB Prac. Guide § 2A.09 -- Persons to Whom the FDCPA Apply -- Federal -- Attorneys May Be "Debt Collectors"

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2nd Cir. Finds Attorney Had “Meaningful Involvement” before Filing Debt Collection Action

by Scott J. Hyman |

In Felberbaum v. Mandarich Law Grp., LLP, No. 22-431-cv, 2023 U.S. App. LEXIS 3370, at *1-4 (2d Cir. Feb. 13, 2023), the Court of Appeals for the Second Circuit affirmed dismissal of an FDCPA claim based on allegations that the attorney did not have meaningful involvement in reviewing the debt. As relevant here, the FDCPA prohibits debt collectors from making… Read More

SCOTUS Issues Obduskey Opinion: Law Firm Engaged in Non-Judicial Foreclosure Is Not Subject to the FDCPA — Unless It Engages In Activities That Would Otherwise Qualify It As A Debt Collector

by Scott J. Hyman |

In Obduskey v. McCarthy & Holthus, LLP, the SCOTUS issued its opinion finding that a law firm engaged in non-judicial foreclosure was not a “debt collector” under the FDCPA.  We post below from the SCOTUS’ syllabus. Law firm McCarthy & Holthus LLP was hired to carry out a nonjudicial foreclosure on a Colorado home owned by petitioner Dennis Obdus- key. McCarthy sent… Read More

Court of Appeals (Mich.) Says Creditor Was Subject to the FDCPA Because In-House Counsel’s Letters Suggested Counsel and Creditor Were Different Entities; Said In-House Counsel Was Not Subject to the FDCPA’s “Employee Exemption”

by Scott J. Hyman |

In Nitzkin v. Craig, 2018 WL 3074061 (Mich.App.), 3 (Mich.App., 2018), the Michigan Court of Appeals found that a creditor’s in-house counsel’s letters subjected the creditor to liability. With regard to the second and third requirements, the letter and Craig's deposition testimony make it clear that Guardian was collecting a debt owed to it while using the name of another.… Read More

9th Circuit Clarifies that While a Trustee Engaged in Non-Judicial Foreclosure is Not a Debt Collector, Attorneys Pursuing Judicial Foreclosure Were Debt Collectors

by Scott J. Hyman |

In McNair v. Maxwell & Morgan PC, 2018 WL 3097153 (9th Cir. 2018), the Court of Appeals for the Ninth Circuit clarified when attorneys are engaged in debt collection under the FDCPA. Our decision in Ho does not, however, preclude FDCPA liability for an entity that seeks to collect a debt through a judicial foreclosure scheme that allows for deficiency… Read More

5th Cir. Says SCOTUS’ Henson Decision Did Not Protect a Lawyer Claiming that He Owned the Debts that He’d Purchased

by Scott J. Hyman |

In Infante v. Law Office of Joseph Onwuteaka, 2018 WL 2438153 (5th Cir. 2018), the Court of Appeals for the Fifth Circuit found in an unpublished decision that Henson did not protect a lawyer claiming that he owned the debts that he’d purchased. On appeal, Onwuteaka claims that he deserves “creditor” status by proxy. His argument (though only barely more… Read More

Court of Appeal (Cal.) Says Anti-SLAPP Law Applies to Debt Collection Practices in Anticipation of Litigation; Affirms Dismissal of Rosenthal Act Class Action

by Scott J. Hyman |

In Berry v. Locke, 2018 WL 1958851, at *2–3 (Cal.App. 2 Dist., 2018), the Court of Appeal in an unpublished decision dismissed a Rosenthal Act class action arising from 3-day cure-or-quit notices served by a law firm in anticipation of litigation. A statement or writing made in a judicial proceeding is protected activity. (§ 425.16, subd. (e)(1)-(2).) Further, “ ‘communications… Read More

District Court (Cal.) Says Creditor’s Defense Counsel is Not Subject to FDCPA Because Defense Counsel Was Not Collecting on a Debt; Says in Dicta that Creditor May Not Be Vicariously Liable for Acts of Litigation Counsel

by Scott J. Hyman |

In Bird v. Real Time Resolutions, Inc., 2017 WL 661375, at *8 (N.D.Cal., 2017), Judge Davila dismissed claims against a creditor and the creditor's law firm arising under the FDCPA. Here, Mr. Reyes is an attorney at the law firm Ericksen Arbuthnot, which was retained as defense counsel for Real Time in the lawsuits filed by Plaintiff. Nowhere in the… Read More

District Court (Ga.) Rejects Debt Collection Lawyer’s Constitutional Challenge to CFPB’s Enforcement Action

by Scott J. Hyman |

In Consumer Financial Protection Bureau v. Frederick J. Hanna & Associates, P.C., Judge Totenberg rejected a debt collection law firm's constitutional challenge under the Noerr-Pennington doctrine and the equal protection doctrine to the CFPB's authority to bring claims against it.  As to the latter, the District Court found no equal protection violation for placing debt collection law firm's clients on different… Read More

CFPB Publishes Final Rule re: Debt Collection; ABA Responds re: Regulation of Attorney Practices

by Scott J. Hyman |

On January 2, 2013 the Consumer Financial Protection Bureau (CFPB) starts its supervision of large debt collection firms that account for 63 percent of the market.  The CFPB announced Final Rule on Wednesday.  The CFPB will regulate 175 debt collection firms that each bring in more than $10 million in annual receipts.  See the live-blog entries from the CFPB's roundtable as to what… Read More

9th Circuit Finds Bona Fide Error Inapplicable, Affirms Large Jury Verdict in FDCPA Case

by Scott J. Hyman |

In McCullough v. Johnson, et. al., here, the Court of Appeals for the Ninth Circuit affirmed a large jury verdict against a debt collection law firm arising from the Firm's prosecution of a debt collection lawsuit. The facts, briefly stated, are as follows: A debt collection law firm in Montana was retained by a creditor to collect a credit card… Read More

District Court (Cal.) Says Unlawful Detainer Attorney “Regularly” Collected Debts under FDCPA

by Scott J. Hyman |

In Riley v. Giguiere, 2009 WL 1748721 (E.D.Cal. 2009),  Judge Karlton addressed whether an attorney involved in an unlawful detainer action was a ‘debt collector’ under the FDCPA.  Judge Karlton held that the attorney was ‘regularly’ engaged in debt collection, explaining:   Briefly, a debt collector includes anyone who “regularly collects or attempts to collect, directly or indirectly, debts owed… Read More