U.S. District Court in New York Grants Debt Collector Motion to Certify Important FDCPA Issue for Interlocutory Appeal

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

In an Order dated May 5, 2016 a Federal Judge in New York has determined that a decision he rendered in the matter of Halberstam v. Global Credit and Collection Corp. (U.S. District Court, ED, NY, 15-cv-5696 (BMC) earlier this year should be certified for an immediate interlocutory appeal. (Editor’s Note: Interlocutory actions are certified by courts when an issue presents a question of law that should be answered by an appellate court before a trial may proceed or to prevent irreparable harm from occurring to a person or property during the pendency of a lawsuit or proceeding. Generally, courts are generally reluctant to make interlocutory orders.)

insideARM wrote about the case on January 14, 2016.  The Fair Debt Collection Practices Act (FDCPA) case involved leaving a message with a person who answers the consumer’s phone. The issue presented by the case was whether a debt collector, whose telephone call to a debtor is answered by a third party, may leave his name and number for the debtor to return the call — without disclosing that he is a debt collector — or whether the debt collector must refrain from leaving callback information and attempt the call at a later time.

The critical facts of the case were not in dispute.  Defendant debt collector telephoned plaintiff about his debt. The person answering the phone (who plaintiff did not identify) responded that “Herschel [the debtor/plaintiff] is not yet in,” and asked if he could take a message. The collection agent responded, in relevant part, “Name is Eric Panganiban. Callback number is 1-866-277-1877 … direct extension is 6929. Regarding a personal business matter.”

In his original decision on January 11, 2016 United States District Court Brian M. Cogan

determined that a polite “No, thank you, I’ll call back,” was the proper action for the debt collector and that “the only way to avoid violating the statute when the recipient of the call was asked if he could take a message was for the caller to make a different decision by politely demurring, and perhaps trying again at some point in the future.”

In the May 5, 2016 Memorandum, Decision, and Order  Judge Cogan wrote:

I had no doubt, and I remain of the view, that the purpose of leaving such a message was to induce plaintiff to return the collection agent’s call without knowing that he was calling a collection agent. Describing the purpose of the call to a third party as a “personal business matter” was at least as suggestive, and probably more, of a business opportunity for plaintiff to make money as it was of its true purpose, which was to cause plaintiff to pay money. I granted summary judgment for plaintiff because I found that by leaving a message for plaintiff with a third party that was calculated to induce a return call without the debtor knowing that he would be calling a collection company, defendant violated section 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”).

I can certify an order for interlocutory review under 28 U.S.C. § 1292(b) when the order “involves a controlling question of law as to which there is substantial ground or difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.

I am convinced that this case has the exceptional circumstances necessary to justify certifying the case for interlocutory review. First, this case presents a controlling question of law. If the Second Circuit were to reverse my grant of summary judgment on plaintiff’s behalf, the case would be over. Further, the issue of whether leaving a message with a third party violates the FDCPA has the potential to impact a large number of other cases, as well as debt collection practices more generally.

Defendant has made a strong showing that not only its current practices, but those of the entire industry, would be significantly impacted by the Court’s ruling in this case. I think that rather than have a single district court decision cause uncertainty as to the continuation of a common practice in an entire industry, immediate appellate guidance on the issue would be preferable.”

insideARM Perspective

Kudos to Judge Cogan for recognizing the significance of his prior decision and certifying the appeal.  However, our insideARM Perspective from our January 14, 2016 article is still relevant: “The only thing clear on this issue is that there is no “right answer.” The best option may be to never leave a message under any situation.  However, in the eyes of many, that leads to what may be deemed as harassment, because it causes additional phone calls — and, perhaps, hang-ups. Let’s hope that the CFPB will address the issue in their upcoming Rulemaking for the debt collection industry.”

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

Posted in Debt Collection News, FDCPA, Featured Post .

×
Subscribe to our email newsletters

Continuing the Discussion

We welcome and encourage readers to comment and engage in substantive exchanges over topics on insideARM.com. Users must always follow our Terms of Use. Also know that your comment will be deleted if you: use profanity, engage in any kind of hate speech, post an incoherent or irrelevant thought, make a point of targeting anyone, or do anything else we find unsavory. Your comment will be posted under your current Display Name, shown below. If you'd like to change your Display Name, you must update it on the My Profile page.

Leave a Reply