Free registration is required to access these resources. Login or Register.

Premium compliance products are also available in the insideARM Store

U.S. District Court Judge Shira Scheindlin began her discussion of a large class action case with the following passage:

Many of the legal arguments and factual allegations in plaintiffs’ eighty-eight page Amended Complaint are difficult to discern. A significant portion of the Amended Complaint consists of text copied and pasted, sometimes without citation, from newspaper articles.

It didn’t get much better for the plaintiffs in Shetiwy et al v. Midland Credit Management et al, a case dismissed Friday by Scheindlin. In her defense, she didn’t have much to work with. Here is how the plaintiffs kicked off their complaint:

The purpose of this lawsuit is to correct the Fifth and Fourteenth Amendment Due Process abuses that have occurred over many years in the State Courts throughout the United States Court systems by principals, the debt collection companies that the principals have sold the debt to and the attorneys who represent those entities. In the debt collection process the Defendants have made the court systems of this country appear as if the courts were the O.K. Corral complete with Wild West shows, robo-signing, and an anything goes approach and other adjectival descriptions that are morally reprehensible, indefensible and vomitous.

In addition to seeking relief and damages under the Fifth and 14th Amendments of the U.S. Constitution, the case alleged violations of the Fair Debt Collection Practices Act (FDCPA) and the Racketeer Influenced and Corrupt Organizations Act (RICO).

The case never really stood a chance, with Judge Scheindlin noting at one point that “one [FDCPA] allegation fails to state who made the harassing communications, or what they were about.”

Rather than seeking remedy for specific violations, the case was intended – in the plaintiffs’ own words – “to expose the criminal and civil violation” of the named defendants and, really, all parties that have ever engaged in debt collection. In addition to naming a dozen of the largest and most prominent debt buyers and collection agencies in the country, the case named the largest credit card issuers in the U.S. as defendants.

As impressive as the defendant list was, it was nothing compared to the class the 15 named plaintiffs were seeking. If the case moved forward, the plaintiffs were seeking a class comprised of basically any U.S. citizen who had been the focus of a debt collection action.

“It was a poorly plead complaint that made wild allegations, none of which were supported by facts,” said Donald Maurice, an attorney for two defendants in the case, Cavalry Portfolio Services and Equable Ascent Financial. “The decision calls this out and warns against bringing similar suits in the future.”

It is remarkable that the case made it this far. The case was filed in September 2012. In July, three banks – American Express, GE Capital, and Citi – won the right to force the case into arbitration (a decision that is under appeal from the plaintiffs) leaving the other defendants to answer.

The plaintiffs do have the right to appeal or file an amended complaint. But Judge Scheindlin wrote that “If plaintiffs’ Second Amended Complaint displays the confused, unintelligible, argumentative, speculative, or rambling qualities of plaintiffs’ Amended Complaint, the Second Amended Complaint will be dismissed without leave to amend.”

 


Related Products

Telephone Communication Compliance: The CFPB's Consent Orders Thumbnail

Telephone Communication Compliance: The CFPB's Consent Orders

Our Telephone Communication Compliance: The CFPB’s Consent Orders guide is designed to help debt collectors comply with consent orders that hint at telephone communication violations. The report includes easy-to-understand explanations of each consent order and a comprehensive chart of all relevant consent orders, keeping the information you need right at your fingertips! This paper has been excerpted from insideARM's larger "The CFPB's Consent Orders Regulating the ARM Industry" report, available for sale now.

Staying Compliant – and Out of Court – with the TCPA Thumbnail

Staying Compliant – and Out of Court – with the TCPA

This reference guide distills the information presented in our webinar. It comes complete with a link to the full recording of the webinar – great for use for all-staff trainings and quarterly in-services -- as well as the slide deck and full transcript of the webinar. This guide doesn’t just walk through what agencies should and should not be doing, going forward -- it contains the full Q&A from the webinar, too. (This product is approved for DBA International Certification Credit.)

The CFPB's Consent Orders Regulating the ARM Industry Thumbnail

The CFPB's Consent Orders Regulating the ARM Industry

Our guide on The CFPB’s Consent Orders Regulating the ARM Industry is the first report of its kind designed to help debt collectors comply with consent orders. The report includes easy-to-understand explanations of each consent order and a comprehensive chart of all relevant consent orders, keeping the information you need right at your fingertips! This report will be updated quarterly.

UPDATED! CFPB’s Advice to the Consumer (through March 2016) Thumbnail

UPDATED! CFPB’s Advice to the Consumer (through March 2016)

The Consumer Financial Protection Bureau hosts more than 80 of the most common consumer questions about debt collection on its Ask CFPB website. And since the Bureau was created for the sole purpose of representing and protecting consumers, debt collectors need to know how the CFPB communicates with them. That’s why insideARM compiled the answers to all 88 questions in one user-friendly report. Using the CFPB’s guidance as a model for your own compliance priorities, policies and procedures means your company will be able to keep up with the Bureau before it feels the need to examine your agency. ALL ANSWERS UPDATED THROUGH MARCH 2016.

Advertisement