On August 4, the United States District Court for the Northern District of Illinois held that legal pleadings can violate the Fair Debt Collection Practices Act.
In Marquez, et al. v. Weinstein, Pinson, P.S., et al., the plaintiffs argued that a law firm and its client violated § 1692e of the FDCPA by including a misleading and deceptive statement in state court debt-collection complaints. The statement in question was a single sentence which stated that the law firm was working on behalf of its client “to collect the debt and that the debt referenced in this suit will be assumed to be valid and correct if not disputed in whole or in part within thirty days of the date hereof.” The plaintiffs’ FDCPA complaint alleged that this language was false and misleading because it contradicts the instructions on the summons which specified that the state court defendant must “file [an answer] within 30 days after service of this Summons” and warns: “IF YOU FAIL TO DO SO, A JUDGMENT BY DEFAULT MAY BE ENTERED AGAINST YOU … .”
In disputing the plaintiffs’ allegations, the defendants advanced a two-fold argument. First, they argued that § 1692e does not apply to statements contained in a state-court complaint. Second, the defendants argued that, as a matter of law, an unsophisticated consumer would not ignore the instructions on the summons in favor of simply “disputing” the debt outside of court.
The Northern District of Illinois first examined the threshold issue of whether § 1692e applies to a state-court complaint. Although the Court stated that nothing “definitively answer[s] the question of whether the FDCPA generally applies to statements in pleadings”, it noted that several courts of appeals have held that it does, or at least have found a violation where deceptive statements were communicated through a legal pleading. The Court ultimately held that, “[a]bsent any clear exemption for the statements in legal pleadings for the reach of § 1692e, the Court will assume that they can violate that section.”
Having answered the threshold question in the affirmative, the Court then moved on to the defendants’ alleged violation. In applying the “unsophisticated consumer” test, the Court noted that, taken on its face, paragraph 12 does not “implicate or refer to the summons instructions or tell the state-court defendant to do, or not do anything in response to the lawsuit.” In finding that Paragraph 12 is not false, deceptive, or misleading as a matter of law, the Court stated that “an unsophisticated consumer would understand the difference between clear instructions on the front page of a state-court summons, stating in bold capital letters the consequences of not responding to the summons, and a paragraph within the attached complaint that notifies the consumer of the right to dispute the debt with the ‘undersigned law firm’ collecting it.” The Court ultimately granted defendants’ motion to dismiss.