The U.S. Court of Appeals for the Third Circuit Has Scheduled an En Bac Hearing in the Riccio v. Sentry Credit, Inc., case in order to reconsider the controlling precedent of the Third Circuit’s Graziano decision.
10/16/2019 9:00
By Andrew Pavlik
Compliance Analyst
As some members of ACA may be aware, the U.S. Court of Appeals for the Third Circuit has long held the opinion that all disputes under the FDCPA must be submitted in writing to be effective; a position that has been rejected by three other circuit courts and by many district courts throughout the nation. This circuit split resulted from the Third Circuit’s decision in Graziano v. Harrison, where the court held that “given the entire structure of [§ 809 of the FDCPA], subsection 809(a)(3) [of the validation notice] must be read to require that a dispute, to be effective, must be in writing.” Notably, § 809(a)(3) of the FDCPA does not include a writing requirement.
The result of this circuit split has created a vexing situation for debt collectors who collect within the Third Circuit, because some district courts within that circuit have found violations of the FDCPA when debt collectors have relied on the text of the FDCPA in their collection notices or have included invitations to call with questions, on the pretext that such notices violate the Third Circuit’s precedent that all disputes must be in writing. ACA recently published an article in Collector Magazine detailing some of the case law that has resulted from the flawed reasoning of the Graziano decision.
During recent oral arguments in the Riccio appeal, the court signaled an interest in a rehearing en banc to reconsider its previous stance on the “in writing” controversy. Then on October 8, 2019, the Third Circuit issued its sua sponte (of its own accord) order to do just that. Alternatively, if the court were to uphold its current precedent, it could result in the matter being appealed to the U.S. Supreme Court. The Third Circuit has scheduled an en banc hearing on the matter for Feb. 19, 2020.
The Third Circuit’s sua sponte order is an incredibly rare occurrence. Indeed, its own local rules cautions that “en banc hearing or rehearing of appeals is not favored.” LAR 35.4. ACA is pleased that the Third Circuit has decided, sua sponte to review the reasoning of this line of cases, as the industry greatly needs clarity on this issue.
For more information on the Riccio case, members can review a short summary of the original decision in today’s Daily Decision.
ACA will continue to report on this issue and advocate for the best outcome for our industry.