In Scheffler v. Gurstel Chargo, P.A., No. 17-2141 (8th Cir. Aug. 27, 2018), the Eighth Circuit Court of Appeals reviewed what communications the Fair Debt Collection Practices Act (FDCPA) permits after the consumer submits a cease communication request to the debt collector. Ultimately, the Eighth Circuit decided that neither a notice of garnishment with a cover letter nor a response to a consumer-initiated inquiry violate the FDCPA even if they occured after the cease communication request.

Factual and Procedural Background

Troy Scheffler (plaintiff-appellant), the plaintiff in the district court case and appellant before the Eight Circuit, was at one point a debt collector himself.

Gurstel Chargo, P.A. (Gurstel), a debt collection law firm, obtained a judgment against plaintiff-appellant for a debt he incurred. While attempting to collect on the judgment, Gurstel mailed a notice of garnishment to Financial One Credit Union and to plaintiff-appellant himself. Plaintiff-appellant’s copy included a cover letter that provided the mini-Miranda disclosure and a statement directing the consumer to contact Gurstel with any questions at its telephone number.

Plaintiff-appellant called the number on the letter and spoke with a representative at Gurstel. The conversation “quickly drifted” to the underlying debt and the plaintiff-appellant asked what he was going to do about the debt. In response to this inquiry, the representative “broached the possibility of settling the debt.” In response to this, plaintiff-appellant told the representative that he previously sent a cease letter to Gurstel and that the conversation violated that directive.

Plaintiff-appellant sued Gurstel in state court for violating the FDCPA by contacting him after he requested a cease in communication, specifically by sending the notice of garnishment and by discussing the option to settle the debt during the phone call. Gurstel removed the case to federal district court, which granted Gurstel’s motion for summary judgment. Plaintiff-appellant appealed the decision to the Eighth Circuit.

The Decision

The Eight Circuit affirmed the district court’s decision, finding that neither communication  violated the FDCPA.

The FDCPA carves out an exception to post-cease request communications in order to allow a debt collector “to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such a debt collector or creditor.” The court was not persuaded by plaintiff-appellant’s argument that the directive to call Gurstel and the inclusion of the mini-Miranda somehow made the letter violative. The court found nothing wrong with Gurstel including their telephone number on a notice of garnishment.

The court likewise found nothing wrong with Gurstel mentioning settlement as an option after plaintiff-appellant himself broached the subject of how to handle the debt. Plaintiff-appellant attempted to argue that he only contacted Gurstel on the topic of the garnishment, but the court found that the facts show otherwise since he was the one who asked what he was going to do about the debt. Agreeing with the Ninth-Circuit, the court found that “1692c(c) does not prevent a debt collector from responding to a debtor’s post-cease letter inquiry regarding a debt.”

The Eighth Circuit’s decision begins by highlighting the fact that plaintiff-appellant was previous a debt collector and “has litigated a number of FDCPA claims against other debt collectors.” Plaintiff-appellant unsuccessfully argued that the district court held his past role against him and did not apply the unsophisticated consumer standard to his case. However, the district court repeatedly pointed out that its reasoning stands even if the unsophisticated consumer standard is applied, regardless of plaintiff-appellant’s past profession.

insideARM Perspective

This case is an example of someone knowing just enough to be dangerous. Here, we have a former debt collector who previously filed a FDCPA cases against debt collectors. He likely knew the basics (like to send a cease communication letter) but not the details (that there are certain exceptions to a debt collector’s requirement to cease communication upon receiving the request). The end result is almost three years worth of litigation without an avenue for Gurstel to recover its defense fees even though it won at both the trial court and appellate level.

With that said, it is always nice to have a higher court lay down the tracks for what is and is not a permitted communication in the context of debt collection considering the sometimes-vague provisions of the FDCPA.


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