The below legal cases have a direct correlation to our industry and how we do business.
On June 30, 2015, the U.S. Court of Appeals for the Third Circuit issued an opinion in Jenson v. Pressler & Pressler and Midland Funding, LLC that follows the Fourth, Sixth, Seventh and Ninth Courts of Appeals in adopting the materiality requirement as a prerequisite for establishing liability under the portions of the statute concerning “false, deceptive, or misleading representations.” The court opined that any misstatement must be material to be a violation of section 1692(e) and that incorrectly stating the name of the Clerk of Court for the Superior Court in a subpoena was not a material misstatement.
On January 21, 2013, the U.S. Court of Appeals for the Sixth Circuit handed down an opinion that defined mortgage foreclosure actions as “debt collection” under the Fair Debt Collection Practices Act (FDCPA), reversing a lower court decision. In Glazer v. Chase Home Finance, LLC, et. al., the appellate panel said that third parties initiating foreclosure actions must comply with the provisions of the FDCPA. The case will now go back to the lower court for further consideration.
On November 14, 2012, The Fourth Circuit Court of Appeals held that a debt collector did not violate the federal Fair Debt Collection Practices Act (FDCPA) when it made multiple calls to a third party in an effort to locate a debtor. In Worsham v. Accounts Receivable Management, a debt collector, who was unable to locate a debtor, instead placed 10 telephone calls to the debtor’s brother-in-law, Worsham. Worsham sued the debt collector alleging it violated section 1692b of the FDCPA. Section 1692b(3) permits a debt collector to obtain “location information” from a third party.
The process of obtaining location information is an important tool to debt collectors. The court recognized that “third parties may understandably find debt-collection calls bothersome or inconvenient,” but multiple calls placed to obtain “location information” are permitted by the FDCPA in certain instances. This ruling is binding only within the Fourth Circuit.
On May 2, 2012, a federal district court in Minnesota ruled that a voicemail left by a debt collector that was heard by the debtor’s children was not a communication as defined by the Fair Debt Collection Practices Act (FDCPA), because the information contained in the message was minimal. The court concluded that the collection agency’s name, the fact that the call was from a debt collector, and a phone number at which the collector could be contacted were all types of information that could be determined by performing a simple web search using the phone number shown on the telephone’s call log. The court reasoned that, “short of requiring debt collectors to block their numbers—it is virtually impossible to use a telephone without revealing directly or indirectly that a debt collector is calling.”
(Zortman v. J.C. Christensen & Associates, D. Minn., No. 10-cv-3086, 5/2/2012)
On October 12, 2012, a federal appeals court in California ruled that debt buyer Portfolio Recovery Associates must stop using an automatic dialing system to call cell phones without prior consent. The 9th Circuit Court in Pasadena, CA supported a preliminary injunction barring Portfolio Recovery from using its “Avaya Proactive Contact Dialer” to dial cell phone numbers that the company obtained through skiptracing. (Meyer v. Portfolio Recovery Associates)
The three-judge panel also approved provisional class certification in an action alleging Portfolio Recovery used the dialer in violation of the Telephone Consumer Protection Act (TCPA). Last year, in San Diego, U.S. District Judge Anthony Battaglia granted an injunction and certification after finding a likelihood of success for lead plaintiff Jesse Meyer. The panel agreed late last week, pointing out that the company had admitted in securities filings that it used “predictive dialers”, which is “sufficient to determine that Portfolio Recovery used an automatic telephone dialing system.”
On January 18, 2012, the United States Supreme Court ruled that cases brought for alleged violations of the Telephone Consumer Protection Practices Act (TCPA) may be filed in Federal Court as a claim asserting original question jurisdiction. In the case of Mims v. Arrow Financial Services, LLC, Case No. 10-1195, the Supreme Court, in a decision drafted by Justice Ginsburg, held that suits brought under the TCPA may be filed in Federal Court giving Federal Courts original jurisdiction and held that State Courts are not the only Courts with jurisdiction over TCPA claims. Previously, Courts had been split on whether TCPA claims were only to be filed in State Court.
On October 27, 2011, DBA (presently known as RMA) filed an Amicus Curiae brief with the U.S. Supreme Court in the case of Mims v. Arrow Financial Services, LLP. DBA urged the Court to clarify that private TCPA actions can be brought in state courts only. Congress directed private TCPA actions to state courts to provide an easy and affordable path to recovery. Allowing claims to be filed in federal courts would turn U.S. District Courts into small claims courts and needlessly increase the costs of all involved.
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