I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Judge Denies MTD in FDCPA, FCCPA Case Over Parking Debt
A District Court judge in Florida has denied a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act and the Florida Consumer Collections Practices Act in a ruling that seems potentially problematic in terms of the definition of debt collector and when a debt is in default. More details here.
WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: This is an interesting case that was probably not well suited for a Motion to Dismiss. The Defendant’s arguments were well-founded, but needed some factual support. That’s the problem with a Motion to Dismiss — the court must accept everything in the Plaintiff’s Complaint as true. Defendant has no opportunity to develop their own factual record at this stage in the litigation. Many of plaintiff’s allegations may be able to be dispelled after discovery. (The allegation that sticks out the most is plaintiff’s claim that the parking garage agreement was obscured. That may be true, but she still chose to park there!) It will be interesting to see Defendant proceeds with the litigation and files a motion for summary judgment which will be able to be supported with facts from discovery.
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Bill Introduced in House to Regulate AI-Generated Robocalls
A bill was introduced in the House of Representatives this week that would amend the Communications Act of 1934 to ensure that systems generated by artificial intelligence are subject to the same rules and regulations as traditional telephone-based systems when it comes to robocalls. The bill, called the Creating Legal and Ethical AI Recordings (CLEAR) Voices Act, was introduced by Rep. Rick Allen [R-Ga.]. More details here.
WHAT THIS MEANS, FROM KHARI GRIFFIN OF CLARK HILL: AI technology is under scrutiny again as a bill targeted at artificial and prerecorded voice systems was introduced to Congress last week. The Bill, called the Creating Legal and Ethical AI Recordings (CLEAR) Voices Act, would amend the Communications Act of 1934 by modifying it to include AI-generated systems, ensuring AI generated robocalls are subject to the same regulations and standards as traditional telephone-based systems. The bill also grants the FCC flexibility to include other emerging technologies in its discretion. As we approach a year since the FCC declared that AI-generated voice calls were subject to the TCPA, this marks yet another attempt to bring AI technology under federal regulation.
Judge Denies Sanctions and Attorney’s Fees in FDCPA Cases
A District Court judge in Oklahoma has denied a defendant’s request for sanctions and attorney’s fees in a pair of Fair Debt Collection Practices Act cases involving the same parties, ruling the defendant did not file its motion for sanctions in time for it to be considered and did not make a strong enough case to have the plaintiff be responsible for its attorney’s fees. More details here.
WHAT THIS MEANS, FROM DAVID SHAVER OF SURDYK DOWD & TURNER: Judge Scott Palk’s Orders in Lemons v. Portfolio Recovery Associates and Brewer v. Portfolio Recovery Associates are good reminders to agencies and defense counsel alike that it is almost always an uphill battle when trying to have sanctions imposed after winning a case. Even though Judge Palk had “concerns” about the behavior of the plaintiffs’ counsel and the representations he was making, sanctions were not imposed. In my experience, judges are simply reluctant to impose sanctions regardless of how frivolous a claim or theory might be. This has to be kept in mind when discussing how to proceed after prevailing against such claims, as it sometimes better to just move on. Though there are certainly situations where sanctions are imposed, those situations seem to be few and far between. Though defendants seeking sanctions, and the attendant possibility that they might be imposed, may deter some consumers and their attorneys, I believe we’ll need to see more orders that actually impose sanctions before many of our adversaries start changing their behavior (for example, actually investigating the claims they bring and the allegations they make before filing a case like they’re supposed to). Until judges start imposing meaningful punishments for litigation abuses, there is little incentive for the more unscrupulous among the consumer bar to stop trying to shake agencies down with baseless filings.
Judge Grants MTD in FDCPA Case Over Email-Only Communication Demand
A District Court judge in Illinois has granted a defendant’s motion to dismiss after it was sued for sending a letter to an individual who had indicated that email was the only convenient channel of communication. The ruling, issued by Judge Georgia N. Alexakis of the District Court for the Northern District of Illinois, was based on the fact that the plaintiff lacked standing to sue because she did not suffer a concrete injury. More details here.
WHAT THIS MEANS, FROM DAVID SCHULTZ OF HINSHAW CULBERTSON: At about the time the Hunstein claims were no longer regularly filed, another trendy claim popped up: lawsuits for inconvenient means of communication. The facts in Kirkman v Blitt are typical of this trend. Plaintiff sent a letter to Bill and claimed that the only convenient means of communication was via email, in part because of her school and work schedule. Blitt subsequently sent a letter and the lawsuit was filed.
The cases have been filed in federal courts but the judges often dismiss them because there is no “injury” sufficient for federal court jurisdiction pursuant to Article III. Kirkman tried to overcome this hurdle with some creative contentions. She alleged as injuries from the receipt of the letter: (1) invasion of privacy, (2) intrusion upon seclusion, (3) personal embarrassment, (4) loss of productive time, (5) emotional distress, (6) frustration, (7) anger, and (8) humiliation. She argued she had “stress and anxiety.” She even argued that a consequence of the letter was insomnia and reduced academic performance. The court was not buying it. In a fairly tight ruling, the court held that each claim of injury was insufficient under Article III. It cited numerous other cases that rejected these types of claims.
This is a lawyer driven claim. We’ll see if it gets much traction. Currently, we are seeing them filed more often in state courts. The judges there also are grappling with the standing issue. Hopefully, the state judges also shut them down.
Judge Dismisses FDCPA Claims Against Owner of Debt
A District Court judge in Arizona has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act case, ruling that the plaintiff failed to sufficiently establish the defendant’s status as a “debt collector” under the statute and did not plead adequate facts to support the alleged violations. More details here.
WHAT THIS MEANS, FROM JAY TILLMAN OF FROST ECHOLS: This is a great case where a judge cut through the chaff and got to the basics in his dismissal. On his own initiative, Judge Logan reminded the parties that words mean things and fundamentals are important and found that Defendant Midland is NOT a debt collector subject to the FDCPA. Because Midland owned the debt and tried to collect it on its own behalf, Judge Logan found that debt collection was not Midland’s principal purpose nor was it a third-party agent collecting the debt of another. Therefore, it cannot be liable under the FDCPA for its OWN collection conduct. In evaluating a claim, never forget to review the baseline elements. As many great coaches say, “It’s about the fundamentals!” Each element and the evidence supporting it is fundamental to sound analysis. Don’t forget to consider the basics before moving on to the complex. Judge Logan created an elegant solution to what would be a messy dismissal or trial when he dismissed Plaintiff’s case on a basic issue thereby saving the time and resources of the Court and each party.”
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
