E.D.N.Y. Calls Out Abuse of FDCPA, Confirms 1692g Requirements Don't Apply to Subsequent Letters

Another judge in the Eastern District of New York criticized plaintiffs' counsel for what the court calls a "lawyer's case"—so technical that only a lawyer, not a least sophisticated consumer, would think of it. Judge Sandra Feuerstein quoted previous decisions by Judge Brian Cogan and Judge Leo Glasser where they noted that these types of cases harm, rather than help, consumers.

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So, What Happened?

The case in question: Campagna v. Client Services, Inc. No. 18-cv-3039 (E.D.N.Y. Dec. 3, 2019). The debt collector mailed a letter to the plaintiff which identified the account as "RE: CHASE BANK USA, N.A." and included an offer "to settle this CHASE BANK USA, N.A." account for less than the full balance owed. Plaintiff, represented by Barshay Sanders PLLC, filed a Fair Debt Collection Practices Act (FDCPA) lawsuit alleging that the letter fails to clearly identify the creditor to whom the debt is owed or to describe the relationship between the debt collector and the creditor. 

Interestingly, the complaint does not claim a violation of §1692g—the section of the FDCPA which states that a debt collector must clearly identify the creditor to whom the debt is owed in the initial communication. Instead, the complaint alleges a violation of §1692e, arguing that the letter was false, deceptive, and misleading. 

The Court's Decision

The crux of the court's decision is that it concluded the letter in question was not the initial letter sent to the consumer, but rather a subsequent letter. This was based not only on the plaintiff's failure to allege a §1692g claim, but also because plaintiff did not state that this was the initial letter. The court found that the creditor identification requirements of §1692g only apply to the initial communication, and thus a §1692e claim based on the failure to meet such requirements in a subsequent communication cannot hold water.

The court went even further to state that even if hypothetically this was the initial letter, the way the creditor was identified is sufficient to meet the relevant §1692g requirements.

FDCPA Abuse

Throughout this decision, the court questions the intent behind this and similar lawsuits brought by plaintiff's counsel. In footnote 6, the judge states:

The Court is hard-pressed not to question whether this nuanced §1692e claim, the only cause of action raised, is being pursued in the hopes of finding a new avenue to FDCPA violations given the carefully crafted Complaint here, as well as in Lugo and Stehly v. Client Services, Inc., No. 18-cv-5103, 2019 WL 2646664 (E.D.N.Y. June 27, 2019) (filing virtually identical compliant as in the instant case and Lugo). Indeed, as Judge Glasser has recently observed, in stating that the FDCPA is intended to prevent debt collectors from trying to trap unsophisticated debtors and is not intended as a trap for compliant debt collectors.

The footnote then quotes Judge Leo Glasser, who in the Kraus case discussed the proliferation of FDCPA litigation:

[T]he number of FDCPA cases filed yearly in this District has more than quintupled. And small wonder, when all required of a plaintiff is that he plausibly allege a collection notice is “open to more than one reasonable interpretation, at least one of which is inaccurate.” This standard prohibits not only abuse but also imprecise language, and it has turned FDCPA litigation into a glorified game of “gotcha,” with a cottage industry of plaintiffs’ lawyers filing suits over fantasy harms the statute was never intended to prevent.

(Internal citation omitted.)

Judge Feuerstein then quotes Judge Cogan from the Ocampo case:

Cases like this – litigation over whether an innocuous debt collection letter is in technical compliance with the FDCPA – are far afield from the original intent behind the FDCPA, i.e.[,] preventing “collection abuses such as use of obscene or profane language, threats of violence, telephone calls at unreasonable hours, misrepresentation of a consumer’s legal rights, disclosing a consumer’s personal affairs to friends, neighbors, or an employer, obtaining information about a consumer through false pretense, impersonating public officials and attorneys, and simulating legal process.” Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002) (internal quotation marks omitted). That is not what happened here at all. Rather, this is a “lawyer’s case,” by which I mean that it alleges a defect of which only a sophisticated lawyer, not the least sophisticated consumer, would conceive.

And, as if to put a cherry on top of this, Judge Feuerstein cites deposition testimony from Kraus in footnote 9, where the plaintiff stated that she sought an attorney to help get her out of debt, not because she "felt abused, deceived, or otherwise aggrieved."

insideARM Perspective

What a whopper of a case! It seems that as time goes on, the historically consumer-friendly Eastern District of New York is picking up on the FDCPA litigation scheme and putting stops to it where it can. 

It's important to note that we were only able to get to this point because debt collectors decided to stand up and defend these lawsuits. If claims are settled early—either pre-litigation or on the outset of litigation—then the cases don't see their way to the judge's desk. If the judges don't see these lawsuits, then they won't recognize the problems that debt collectors are facing. There's nothing judges like less than asinine cases clogging their already over-filled dockets.

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