The Court of Appeals for the Ninth Circuit has affirmed a lower court’s ruling granting summary judgment in favor of a defendant that was accused of violating the Fair Debt Collection Practices Act by filing a counter-complaint against the plaintiff while collecting unpaid assessments for a condominium association in Hawaii.
The background: The defendant, a law firm, was engaged in collection efforts on behalf of an association of apartment owners.
- The plaintiff filed suit against the defendant over those collection efforts, and the defendant responded by filing a counter-complaint, a filing that was compulsory under Hawaii’s court rules.
- The counter-complaint was served through Hawaii’s Judiciary Electronic Filing and Service System, and the certificate of service listed only the plaintiff’s attorneys as recipients, not the plaintiff herself.
- The plaintiff alleged that the filing of the counter-complaint violated the FDCPA and also constituted intentional infliction of emotional distress under state law.
- A District Court judge in Hawaii granted summary judgment in favor of the defendant and denied the plaintiff’s motion for partial summary judgment, and the plaintiff appealed to the Ninth Circuit.
- On appeal, the plaintiff argued that by filing the counter-complaint electronically on a public docket, the defendant had “published it to the entire world.”
The ruling: The Appeals Court affirmed, addressing the question of whether a legal pleading served only on a consumer’s attorneys can be the basis of an FDCPA claim.
- The panel noted that while the FDCPA applies to attorneys who regularly engage in consumer debt collection, communications directed only to a debtor’s attorney are not actionable under the statute as long as they are not accompanied by any threat to contact the debtor directly, a rule rooted in the statute’s purpose of protecting unsophisticated consumers and one that applies equally to legal pleadings.
- Because the counter-complaint was served solely on the plaintiff’s attorneys, it fell squarely within that rule.
- The panel rejected the plaintiff’s “entire world” argument, writing that it erased the distinction between those who actually receive a communication and those who merely have access to it, and noted that a prior ruling had reached the same conclusion even though professional conduct rules require attorneys to share such communications with their clients.
- Turning to the emotional distress claim, the panel found the plaintiff could not show the defendant’s conduct was “outrageous,” which state courts define as “without just cause or excuse and beyond all bounds of decency,” because the counterclaim was compulsory under state law and nothing about the actions taken, or the numbers quoted, by the defendant came close to meeting that standard.
