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 Dismisses FDCPA, FCRA Case Over Who Owed Debt
In a case that was defended by Dale Golden and Joe Proulx of Martin Golden Lyons Watts Morgan, a District Court judge in Alabama has granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case, ruling that an illegible signature on a work order was not sufficient to allow the defendant to determine that the account was someone else’s and not hers. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: The plaintiff in this case essentially claimed that the debt was not hers, but the factual background was not so straightforward. The plaintiff was a healthcare provider who assisted her patient with obtaining internet service. During that process, the plaintiff’s name became associated with the account as a responsible party. The Eleventh Circuit has held that to prove that a furnisher’s investigation was unreasonable, the plaintiff in an FCRA case must identify some facts that the furnisher could have uncovered that would show that the furnisher’s information was inaccurate or incomplete. Due to her involvement in setting up the internet service, the plaintiff was unable to show how the furnisher could have determined that she was not responsible for the account.
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Appeals Court Affirms Ruling for Defendants in TCPA Case
The Court of Appeals for the Fourth Circuit has agreed with a lower court’s ruling that a group of lawyers and debt relief companies did not engage in “sham litigation” when they allegedly lured individuals into filing lawsuits against student loan giant Navient for violating the Telephone Consumer Protection Act. More details here.
WHAT THIS MEANS, FROM LORAINE LYONS OF MARTIN GOLDEN LYONS WATTS MORGAN: In response to 61 TCPA lawsuits filed by attorney Jeff Lohman on behalf of student loan borrowers, Navient chose to fight back by filing a RICO lawsuit against Lohman and other defendants, accusing them of using questionable and fraudulent tactics to generate these lawsuits. Although Navient initially secured a jury verdict of over $1.14 million in 2021, the tide turned when the district court vacated the verdict in 2023, and the Fourth Circuit upheld this decision on appeal. The Circuit Court ruled that the litigation involved in the TCPA lawsuits was protected under the Noerr-Pennington doctrine, rejecting the “sham litigation” exception. The Court concluded that the TCPA cases raised legitimate legal issues. However, the Court did leave open the questions of whether the Noerr-Pennington immunity applies to private arbitration, pre-suit conduct, and non-litigant defendants.
Litigation is costly, and while Navient did not ultimately prevail, Lohman and the other defendants experienced financial and non-financial challenges of what it’s like to be on the defending side of the table.
S.C. Supreme Court Drops Review of Right-to-Cure Lawsuit
The South Carolina Supreme Court has changed its mind and will not issue a ruling in a case over whether a debt collector is required to send a right-to-cure notice to a consumer under state law before filing a lawsuit to collect on an unpaid debt. More details here.
WHAT THIS MEANS, FROM DAVID SCHULTZ OF HINSHAW CULBERTSON: Dismissed as improvidently granted – a DIG. It is a supreme court term when certiorari is granted but the court later determines that it should not issue a decision. It does not happen very often. I was involved in a case where it once happened. It is a huge let down for the litigants.
It happened in PRA v Campney. The South Carolina Supreme Court agreed to decide the case, including application of the state right-to-cure statute to a debt buyer. It was briefed and argued but the Court remanded it for further proceedings. The application of a right-to-cure state law is an important issue. Earlier this year the Court of Appeals of Wisconsin adversely decided it in Bank of America, N.A. v Riffard.
The industry could use a win on the issue. Perhaps Campney will wind back through the appellate process after the trial court hears the matter further and enters a final order. Alternatively, the debt buying industry may want to look into lobbying efforts to clarify these laws. It is doubtful the intent was to apply them to debt buyers.
Appeals Court Overturns Ruling in FCRA Dispute Case
The Court of Appeals for the Third Circuit has overturned a summary judgment ruling in favor of a defendant that was sued for violating the Fair Credit Reporting Act because it reported an overdue balance to the credit reporting agencies after receiving notice that the balance was being disputed by the plaintiffs. More details here.
WHAT THIS MEANS, FROM DAVID GRASSI OF FROST ECHOLS: This Third Circuit decision once again highlights the fact-intensive nature of FCRA litigation. The plaintiffs leased a Nissan and returned it to the dealership on the last day of the lease. However, they did not follow the procedure which was outlined by the dealership but which was not contained in the lease. The dealership therefore refused to “accept” the vehicle and Nissan continued to try and charge the plaintiffs. After plaintiffs complained, Nissan’s complaint department sided with the plaintiffs and determined they owed nothing but, because the letter from the dealership to Nissan explaining the dispute contained a typo in the VIN, Nissan’s credit department continued to report the debt to plaintiffs’ credit reports despite numerous disputes.
The District Court granted summary judgment in favor of Nissan, holding the dispute to be a legal dispute, not a factual dispute. The Third Circuit disagreed but did not reach the question of whether a legal dispute is sufficient under the FCRA because it determined a jury could find the debt was factually inaccurate based on the findings of Nissan’s complaint department and could find Nissan’s investigation was unreasonable. The lesson, as always, is that FCRA cases are often fact-intensive and, therefore, it is often difficult for a defendant to ultimately prevail on such a claim through a pre-trial dispositive motion.
Appeals Court Reverses Ruling in FCRA, RFDCPA Case
The Court of Appeals for the Ninth Circuit has reversed a ruling in a Fair Credit Reporting Act and Rosenthal Fair Debt Collection Practices Act case over whether information that was furnished to the credit reporting agencies was accurate enough. This decision comes after a lawsuit was filed by the plaintiff over inaccurate loan reporting. More details here.
WHAT THIS MEANS, FROM JUSTIN PENN OF HINSHAW CULBERTSON: This opinion is as short as it is confounding when it comes to analyzing the interplay between furnishing “technically correct” information that is nonetheless still “materially misleading.” Indeed, for most unfamiliar with this area of the law, it is enough to make heads explode. But in the credit furnishing world generally, and the Ninth Circuit in particular, information can be both technically correct and materially misleading. The overall take away from this case is that if you are furnishing information to the bureaus, it is critically important to note when you receive a dispute, even everything else reported is correct. In that way, you will minimize the risk underscored here of materially misleading whether the debt is in fact disputed even when everything you furnished was technically accurate.
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.
