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Pennsylvania Letter-Vendor Case Will Continue Despite Request for Stay

The court declined to stay an FDCPA lawsuit until the 11th Circuit en banc panel issues a decision in Hunstein v. Preferred Management Collection & Management Services.

02/08/2022 11:00 A.M.

3 minute read

A Fair Debt Collection Practices Act case similar to Hunstein v. Preferred Management Collection & Management Services will continue in the U.S. District Court for the Middle District of Pennsylvania after a judge denied the defendant’s request to stay the filing pending the outcome of the Hunstein case, which is scheduled for oral argument Feb. 22.

On Jan. 5, the defendant in Kelie Palladino v. Client Services Inc. filed a motion to stay the case while the 11th Circuit Court of Appeals considers the prior en banc  panel opinion in Hunstein.

“The [d]efendant claims that a stay in the instant action is appropriate while the [11th Circuit] reconsiders its ruling on the stated issues since plaintiff’s claims here mirror the issues in the appeal case,” according to the decision on the stay in the Palladino case.

Palladino, the plaintiff, asserts that the “defendant debt collector violated the FDCPA by making an improper third-party disclosure when it allegedly used a letter vendor and conveyed to the letter vendor information about [the] plaintiff and the debt that she allegedly owed for the purposes of generating and mailing to the plaintiff a collection letter,” according to the decision.

Specifically, the plaintiff contends that the defendant’s alleged transmission of her personal information to the third party was a communication made in connection with the collection of a debt and that it is a violation of Section 1692c(b) of the FDCPA, which entitles her to statutory damages.

In her complaint, the plaintiff relied in part on the 11th Circuit’s now-vacated decision in Hunstein. The plaintiff also filed a brief in opposition to the defendant’s motion for a stay.

The court considered four factors when reviewing whether to grant the defendant’s motion for a stay:

  • The length of the requested stay.
  • The “hardship or inequity” that the defendant in this case would face in going forward with the litigation.
  • The injury that a stay would inflict upon the plaintiff in this case.
  • Whether a stay will simplify issues and promote judicial economy.

“After careful consideration of the four factors outlined above, the court finds that they do not weigh in favor of staying this case pending a final decision by the [11th] Circuit’s en banc panel in Hunstein, particularly since neither the vacated decision in Hunstein nor the [11th] Circuit’s en banc decision, when issued, will be binding precedence with respect to this court’s consideration of the plaintiff’s claims,” according to the judge’s decision on the stay request in Palladino.

In the decision to deny the request for a stay, U.S. District Judge Malachy Mannion notes that there is no set timeframe for which a decision will be made in Hunstein after the oral argument this month and “indefinite stays are disfavored.”

To read Mannion’s complete decision, click here.

Related Content from ACA International:

Preferred Collection’s Brief in Hunstein Argues Plaintiff Lacks Article III Standing, FDCPA Does Not Prohibit Communications With Agents

State Creditors Bar Associations, U.S. Chamber of Commerce File Briefs in Support of Preferred Collection

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