A Magistrate Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action lawsuit on the grounds the plaintiffs lacked standing to sue after accusing the defendant of attempting to collect without a license to do so under state law. The plaintiffs attempted a unique strategy that hinged on alleging a violation under the tort of unreasonable debt collection, which is recognized in one jurisdiction – Texas.
The Background: While this is not the first time that a plaintiff has blown the dust of the tort of unreasonable debt collection, this is yet another instance where a judge has ruled that the tort doesn’t have a place in today’s legal system.
The Ruling: In this case, Judge Michael A. Hammer of the District Court for the District of New Jersey has ruled that the tort of unreasonable debt collection is not a traditional cause of action that confers standing for the plaintiffs to pursue their lawsuit.
- That tort has four elements, Judge Hammer noted: (1) unreasonable collection efforts have been made against the plaintiff; (2) these efforts were taken with a reckless disregard of the welfare and health of the plaintiff; (3) the collection efforts were the proximate cause of any physical distress and emotional and mental pain of the plaintiff; and (4) the defendant intended such harm against the plaintiff.
- In this case the letter in question “can hardly be characterized as unreasonable or reckless,” Judge Hammer wrote. “… the Court cannot find the content of the letters to be threatening, hostile or aggressive, nor can the Court find that Defendants’ action of alerting Plaintiffs of the amount of money owed to be threatening or harassing.”
The plaintiffs also attempted to argue they had standing because the defendant fraudulently misrepresented themselves, but the plaintiffs’ complaint is “devoid of any mention of incurred expenses, actions taken, or possible inactions as a result of the letters,” the judge wrote.
