In a case that was originally filed nearly a decade ago and is finally seeing the light of day after other suits filed by the same plaintiffs were played out in District Court and before the Court of Appeals for the Ninth Circuit, a District Court judge in Oregon has adopted a Magistrate Court judge’s recommendation not to allow the plaintiffs to file a second amended complaint in a Fair Debt Collection Practices Act case.
The background: This plaintiffs contended that after they defaulted on their credit card accounts, the defendant initiated “account stated” claims in Oregon state court to collect the debts. They argued that a Virginia choice-of-law provision in the original cardholder agreements should govern, subjecting the claims to Virginia’s three-year statute of limitations (SOL), which had allegedly expired. This, they claimed, made the collections actions time-barred and thus a violation of the FDCPA.
- Additionally, the plaintiffs alleged that the defendant’s practice of filing these collections suits constituted unfair trade practices under the UTPA, as the claims were purportedly meritless or “sham” filings designed to bypass the shorter SOL.
- The parallel cases provided key context: one affirmed that Oregon’s six-year SOL applies and that account stated claims are viable for credit card debts under Oregon law, while another Oregon Supreme Court decision denied summary judgment on a similar account stated claim due to factual disputes but upheld the longer SOL.
- After the stay was lifted in 2023, the plaintiffs filed a first amended complaint, prompting the defendant to partially move for dismissal. The court granted that motion, dismissing the FDCPA count related to the SOL and the UTPA claim without prejudice, citing the absolute litigation privilege for pleadings in judicial proceedings. The plaintiffs were allowed to seek amendment for the UTPA claim, leading to the current motion.
The ruling: Judge Adrienne Nelson of the District Court for the District of Oregon adopted the magistrate judge’s recommendations in full, denying the plaintiffs’ motion to file a second amended complaint.
- For the FDCPA claims, the court reiterated that Oregon’s six-year SOL applies, not Virginia’s, rendering the collections actions timely. The proposed amendments, which added allegations of “sham” filings and a new count about a collection letter demanding payment on an allegedly time-barred debt, were deemed futile. “Even if the claims lacked merit, failing to plead an element of an account stated claim is not a per se violation of the FDCPA,” Judge Nelson wrote.
- On the UTPA claim, amendments adding details about ascertainable losses (e.g., economic harms) were insufficient to overcome Oregon’s absolute litigation privilege, which protects communications in judicial proceedings and extends to statutory torts like the UTPA.
- The ruling also highlighted procedural flaws, such as missing exhibits in the proposed complaint, and suggested undue delay since the plaintiffs knew of these facts earlier. This decision effectively ends the plaintiffs’ attempts to revive the claims, providing clarity for industry professionals on using account stated theories in Oregon collections.
