Tomio Narita

The Fair Debt Collection Practices Act (FDCPA) prohibits collection lawyers from making materially false or misleading statements to consumers or to third parties when collecting consumer debts.  But the FDCPA was not designed to regulate the practice of law.  The Act does not define when an attorney is acting “as an attorney” or in a “legal capacity” for his client, and when he is not.  The statute was not meant to be used by courts and consumer attorneys as a vehicle for dictating the interactions between a collection attorney and his client.

For these reasons, the National Association of Retail Collection Attorneys (NARCA) recently filed an amicus brief in the United States Supreme Court in Law Offices Of Mitchell N. Kay, P.C. v. Darwin Lesher, Case No. 11-492, urging the Court to grant the firm’s petition for writ of certiorari and to reverse the decision issued by Third Circuit Court of Appeals, Lesher v. Law Offices of Mitchell N. Kay, 650 F.3d 993 (3d Cir. 2011).

In Lesher, the Third Circuit interpreted the FDCPA in a way that improperly interferes with the attorney-client relationship.  The defendant law firm in Lesher had sent polite settlement letters to a consumer which made no reference to litigation.  The Lesher Court found that the settlement letters violated the FDCPA, however, and its ruling arguably held that attorney cannot act “as an attorney” for his client, nor act in a “legal capacity” for his client, unless the attorney has reviewed the consumer’s file and has determined that the consumer is a “candidate for legal action.”  See Lesher, 650 F. 3d at 1003.  But the law firm was, in fact, representing its client, and there was no evidence that the client was unhappy with the level of review conducted by the firm before the letters were sent.

The FDCPA does not dictate the steps that an attorney must take in order to properly represent his client.  The Act does not define when an attorney is acting “as an attorney” or in a “legal capacity” for a client.  There is nothing in the FDCPA stating that a creditor can only hire a lawyer to communicate on its behalf after the creditor has decided that the consumer is a “candidate for legal action.”  The Lesher ruling effectively prevents creditors from engaging an attorney to notify a consumer that he is a candidate for settlement short of litigation.  But there is nothing to suggest that when Congress passed the FDCPA, it wanted to prohibit all communications between collection attorneys and consumers prior to the time that the client has decided to file suit.

NARCA also urged the Court to expressly reject the so-called “meaningful involvement” doctrine that has been adopted some circuit courts.  See, e.g., Clomon v. Jackson, 988 F.2d 1314, 1320-21 (2d Cir. 1993); Avila v. Rubin, 84 F.3d 222, 228-29 (7th Cir. 1996).  Although the FDCPA prohibits the use of collection letters which falsely state they are from an attorney (see 15 U.S.C. § 1692e(3)), there is no “meaningful involvement” requirement in the FDCPA, nor any basis for using the Act to regulate the manner in which an attorney must review his client’s files before communicating with a consumer.  See 15 U.S.C. §§ 1692-1692p.

Lawyers should certainly be involved in all of the legal work they do for their clients.  But the level of involvement, the scope of the work to be performed, and the steps the attorney must take to get the job done, are things that must be left for the lawyer and the client to decide.  The FDCPA is not the mechanism for determining what is “meaningful” legal work, and what is not.  The judiciary and the states, not Congress, regulate the professional standards for the bar and oversee the conduct of attorneys when they interact with clients.  See, e.g., Paul E. Iacono Structural Eng’r, Inc. v. Humphrey, 722 F.2d 435, 439 (9th Cir. 1983) (“[T]he regulation of lawyer conduct is the province of the courts, not Congress.”).

Of course, Congress may properly prohibit collection attorneys from making false statements in letters sent to consumers.  But the FDCPA should not be read expansively in a manner that would allow judges, juries and consumers to second-guess the quantum and quality of the review performed by a collection attorney on behalf of his client.  A collection lawyer, working in conjunction with his client, must be allowed to decide what amount of attorney involvement, if any, is appropriate before a settlement letter is sent on behalf of the client to the consumer.

A copy of NARCA’s motion for leave to file the amicus brief, and the amicus brief, can be found here:

Tomio Narita is a partner of Simmonds & Narita LLP, a California law firm specializing in defending claims arising under the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Rosenthal Act.

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