A summary of this week’s top cases. Editor’s note: This content is available for members only.
6/21/2020 7:00
Each week, ACA International’s Compliance Analysts Laura Dadd and Andrew Pavlik compile relevant case summaries for ACA members. Here is a recap of the cases this week. Members may also submit cases for consideration to our compliance team at [email protected].
D.C. Circuit finds that Consumer did not have Article III Standing to Bring FDCPA Claim
The consumer bought a car and after losing her job and becoming homeless, fell behind on payments. The consumer defaulted on her loan and voluntarily surrendered the car to the bank. However, there was a balance left on the loan that was not satisfied by surrendering the property. The loan changed hands several times after the vehicle has been returned. The last company to purchase the loan hired a debt collection attorney to attempt to collect the deficiency balance from the consumer.
The collection attorney mailed the consumer a pair of letters explaining that the debt buyer had purchased her debt and instructing her to submit all future payments to the collection attorney’s office.
Court Refuses to Change Venue as the Balance of Convenience is a Close Call
The consumer filed a lawsuit claiming that the debt collector attempted to collect disputed debts for medical services. The consumer lives in St. Clair County, Illinois and the debt collector is in Peoria, Illinois. The debt collector moved to have the venue changed from St. Clair County in the Southern District of the state to Peoria, which is in the Central District. The debt collector argued that all its witnesses live in or close to Peoria, including an employee who spoke with Plaintiff on the telephone and the president of the debt collection company. However, the debt collector did not state how the witnesses would be inconvenienced if the case was litigated in the Southern District. The court assumed that it would be more convenient for the witnesses to travel to Peoria for the trial. The court also assumed that it would be more convenient for the consumer to keep the trial in the Southern District.
District Court Finds Dialer Was Not an ATDS
In this case a debt collector attempted to contact a consumer when his loans became delinquent, and when it was unable to reach the consumer, it attempted to contact his credit references to get up-to-date contact information for consumer. The consumer and others who received the calls (plaintiffs) filed suit, alleging the calls violated the FDCPA and the TCPA. The debt collector moved for summary judgment on the TCPA claims, arguing the system used to call the plaintiffs was not an ATDS as defined by the TCPA. Additionally, the debt collector moved for summary judgment on the FDCPA claims alleging the loans at issue were not in default and were thus not subject to the FDCPA.
Court Tosses TCPA Class Claim Based on Holding in Gadelhak
In this case, a consumer owed a debt for cable television services and after the debt was sent to collections, she began receiving debt collection texts on her cell phone. She later filed for bankruptcy but continued to receive collection texts until after the second time she texted “stop” back to the debt collector. She later filed suit, alleging the texts violated the TCPA and FDCPA. The court initially certified a class of approximately 4,300 members that had allegedly received more than 6,500 text messages after texting back the word “stop” in response to the texts.
The case takes several turns, but the most important takeaway is the court’s ruling on the dialing system used by the debt collector.
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