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Among the seemingly hundreds of controversies brewing in TCPAWorld, one asks whether a consumer can face a counterclaim for collection of a debt in a TCPA suit brought against a loan servicer or collector for purportedly illegal calls. While the issue seems straightforward—the debtor owes the money and the defendant should be able to collect (or at least offset) the amount owed on the contract in the TCPA suit—many courts have refused to permit such counterclaims fearing that offensive action by a TCPA defendant might somehow “chill” consumer protection lawsuits.


Well, in a recent case, the Northern District of California applied the “majority rule” and common sense (IMO) by allowing a counterclaim to proceed. In Nalan v. Access Fin., Case No. 5:20-cv-02785-EJD, 2020 U.S. Dist. LEXIS 198836 (N.D. Cal.  October 23, 2020), the Plaintiff (allegedly) stopped paying for his car and received collection calls as a result. The Plaintiff sued the collector, who responded with a counterclaim for the $1,778.00 it was (allegedly) owed.

The Plaintiff responded by moving to dismiss the counterclaim asserting a lack of jurisdiction. The Court was unpersuaded and found that the debt and the phone calls arose out of the same nexus of operative facts:  

Here, both Plaintiff’s and Access’ claims are related to the underlying automobile loan debt owed by Plaintiff to Access. These claims may be fairly classified as part of the same “case or controversy” and therefore, the Court may exercise supplemental jurisdiction over Access’ counterclaim pursuant to 28 U.S.C. § 1367(a).


This is a great case to keep handy as Defendants often disdain the prospect of facing a lawsuit from a consumer that has failed to pay their obligations and yet is looking for a windfall under the TCPA. At least pursuing a counterclaim allows the parties to equalize their position between one another and reduce all burdens and obligations to a single judgment. Plus, this tactic can be a great class action killer. 

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