On March 12, 2015, the Sixth Circuit Court of Appeals reversed a lower court’s decision to grant a motion for judgment on the pleadings in a putative class action alleging that a collection law firm violated the Fair Debt Collection Practices Act (FDCPA) by seeking attorneys’ fees from a consumer who defaulted on a credit card account. The decision turned on the issue of which state law governed the credit card dispute – Utah or Ohio.

Ohio, the plaintiff’s residence, does not enforce provisions for the collection of attorney’s fees in consumer contracts, but Utah, the state designated in the credit card agreement’s choice-of-law clause, does. The plaintiff claimed that Ohio law governed, barring the fees, and that the defendants’ state court complaint was therefore a false or misleading representation or an unfair practice in violation of the FDCPA.  He argued that the Utah choice-of-law provision should be disregarded because it was unilaterally chosen by the bank.

The Sixth Circuit ultimately ruled in the plaintiff’s favor, finding that the record did not contain enough evidence to determine which state would have a greater material interest in the determination of the issue. The Court explained:

A complete analysis of these factors would have revealed just how little information was in the record.  Again, the ultimate creation of the contract plausibly occurred in Ohio, and it is not clear where the performance of the contract occurred. It is plausible that many of the relevant contacts will relate more closely to Ohio, such that Ohio law would apply absent the choice-of-law provision, but any certainty on the issue would be premature.

On remand, the Sixth Circuit advised the lower court to either request that Wise provide answers to many of the unresolved questions about the dispute or conduct limited discovery into the contacts of each state to the credit card agreement.

The opinion in Wise v. Zwicker & Associates PC, et al., No. 14-3278 can be found here.