A district judge in Maryland last month dismissed a potential class action lawsuit against a debt buyer due, in part, to a rejection of the notion that a technical error constituted a violation of the Fair Debt Collection Practices Act (FDCPA). Another claim that tried to piggyback on the widely-publicized “robo-signing” issue with debt collection lawsuits was also rejected.
Judge Catherine Blake in the U.S. District Court of Maryland on April 16 granted the defendant’s motion to dismiss in Suzanne Hill et al. v. Midland Funding et al. The case was filed in August 2012 and oral arguments were heard April 3. The filing sought class action status and damages of around $5.5 million.
The three plaintiffs named as class representatives were each sued by Midland. In the lawsuits, Midland apparently filed the cases with the wrong address for the company, instead listing the address of parent company Encore Capital Group. The suit alleged that since Encore was not licensed to collect in Maryland, the address error was a violation of the FDCPA. Midland, however, was licensed to collect in the state.
Blake disagreed that this violated the federal law, writing, “Mere technical violations of state law in the filing of such suits, however, are not automatically violations of the FDCPA.” She also wrote that “This technical error is not a ‘false representation’ or the kind of ‘abusive debt collection practice’ that the FDCPA was designed to prevent.”
In another claim, the plaintiffs said that the affidavits used in the debt collection lawsuits filed by Midland were “false” and were “artfully and deceptively worded to falsely appear to be made upon personal knowledge.” The claim was attempting to piggyback on issues Midland has had with their affidavits, most famously litigated in its long-running Brent case.
The Hill case actually led with Midland/Encore’s previous problems, opening the filing by calling the company a “notorious” debt buyer and referencing various other actions. The suit said that because the affidavits were not sufficient for judgment (Midland did, in fact, lose the cases against the plaintiffs that went to trial based on insufficient affidavits), that they were false and misleading.
But Judge Blake saw no “false” in the affidavits presented in the case. She wrote, “The plaintiffs’ claim is based entirely on the argument that, because the affidavit may not be sufficient to…warrant a judgment in favor of Midland, it violated § 1692e. But the affidavits themselves, attached as exhibits to Midland’s motion, do not actually contain any ‘false’ statements. For example, the affiant in the first Hill collection case states only that she has personal knowledge of the records of the debt that Chase conveyed to Midland. The plaintiffs do not allege that this statement itself was false, and the court finds no reason to believe it was.”
Blake noted that the plaintiffs’ claim that the case was similar to Brent was misplaced. Well before the Brent case was settled, Midland/Encore changed its practices with relation to collection lawsuit affidavits. Blake, in effect, affirmed those changes, by noting that the language in Brent affidavits was different from the language in the affidavits in this case.
She wrote, “Filing wholly truthful affidavits that some state courts may hold to be insufficient in an attempt to obtain default judgments is not a misrepresentation or other falsehood violating § 1692e” of the FDCPA.
Blake granted Midland’s motion to dismiss all claims in the suit.