I will say at the start that this is one of those “this appears interesting to me but I am not a lawyer and sometimes things I think are interesting turn out in fact to be not interesting at all” cases, but a District Court judge in Maryland has issued a ruling in a case that seems to involve a new type of company and whether it meets the state’s definition of debt collector.
The background: The plaintiffs were treated by physicians following car accidents. Instead of billing insurance, the medical providers used the defendant to reach out to the plaintiffs’ attorneys with what the court described as a “request” to allocate a portion of any settlement proceeds to cover medical charges. The plaintiffs filed suit, claiming this was a deceptive and unlawful attempt to collect debts at the “full rack rate” — the non-discounted cost of medical services — which they argued should have been billed to insurance at negotiated or statutorily capped rates. The plaintiffs alleged violations of:
- The Maryland Consumer Debt Collection Act (MCDCA)
- The Maryland Consumer Protection Act (MCPA)
- Various common law claims, and
- RICO (which the court later dismissed)
The ruling: Judge Adam B. Abelson of the District Court for the District of Maryland granted the motion to dismiss some claims but allowed the core claims under the MCDCA, MCPA, and common law to proceed.
- Among the court’s key findings:
- The defendant’s “demands may have been more politely worded than some collection notices… but there is no politeness exception in the MCDCA; a ‘collector’ who says ‘please’ is still a ‘collector.’”
- The judge concluded that the letters sent by the defendant — including requests to “retain an amount equal to the Medical Group’s interest in trust” — could plausibly be interpreted as efforts to collect debts, making the defendant a “collector” under the MCDCA.
- Judge Abelson also rejected the argument that the defendant wasn’t a collector because it wasn’t targeting the consumer directly., saying “Whether the demand was reasonable or lawful is a separate question; the point for current purposes is that the demand was made, at least in part, to Plaintiffs through their counsel.”
