A district court in the Seventh Circuit has denied a motion to dismiss filed by a collection attorney acting on behalf of a debt collector client, holding that the plaintiff in the case could pursue her claim based on the attorney’s failure to provide his own § 1692g validation notice in an initial communication, even though the attorney’s communication did contain a proper validation notice on the debt collector client’s behalf, and even though the debt collector client had already sent a prior, properly noticed communication. The case is Sanchez v. Jackson, 2016 U.S. Dist. LEXIS 160776 (N.D. Ill. Nov. 21, 2016).
The court addressed several issues in reaching its ruling. First, citing Heinz v. Jenkins, 514 U.S. 291 (1995), the court found that the plaintiff had easily alleged sufficient facts to conclude that the collection attorney was a debt collector subject to the FDCPA. Noting Heinz’s ruling that the FDCPA “applies to attorneys who ‘regularly’ engage in consumer-debt-collection activity,” the Sanchez court also observed that the letter in question – sent by the attorney, not the debt collector client – included the bold disclaimer, “This communication is from a debt collector.”
The court then rejected Defendants’ argument that the attorney was merely acting as the debt collector’s agent, finding persuasive Ninth Circuit case law to the contrary (see Hernandez v. Williams, Zinman & Parham PC, 829 F.3d 1068 (9th Cir. 2016)), as well as Congress’ repeal of the FDCPA’s former exemption for lawyers “collecting a debt as an attorney on behalf of and in the name of the client.” The court further found this consistent with the prior Seventh Circuit case of Marquez v. Weinstein, Pinson & Riley, P.C., 836 F.3d 808 (7th Cir. 2016), concluding that the defendant attorney was an “independent attorney agent” debt collector.
Because the debt collector client had previously sent its own validation notice in a separate communication, the Sanchez court then waded into the question of whether § 1692g’s validation notice requirement “applies only to the first debt collector to make contact with a debtor, or rather to each successive debt collector in line.” Acknowledging a split of authority, the court noted that “[t]he trend, however, has been towards the latter,” and ultimately declined to “read a loophole into § 1692g that would exempt successive debt collectors from sending a validation notice.”
Having concluded that a validation notice was required in the attorney’s initial communication to the debtor, the court then considered whether the validation notice that was provided – on behalf of the client debt collector – was sufficient. After a lengthy, “holistic reading” of § 1692g, the court ultimately concluded that it was not, finding instead that relieving the attorney of the obligation to provide his own validation notice “would introduce needless confusion to the debt verification process.” As a result, the court found that “an attorney debt collector making notification must provide his own debt notice in addition to, or in lieu of, that of his client.”