In Anglin v. Merchants Credit Corporation, No. 2:18-cv-507-BJR, 2020 WL 4000966 (W.D. Wash. July 15, 2020), United States District Judge Barbara Jacobs Rothstein held that the defendants did not violate the Fair Debt Collection Practices Act (“FDCPA”) by failing to follow state procedural rules in obtaining a writ of garnishment as part of a debt collection action. This decision is significant because it adds to the litany of cases holding that violations of state procedural rules generally cannot form the basis for an FDCPA claim against the debt collector.
Married couple Heidi and Ernest Anglin (the “Anglins”) brought an action against Merchants Credit Corporation and Jason Woehler (collectively, “Merchants”). The Anglins collectively owed approximately $3,000.00 in medical debt. The debt was assigned to Merchants to collect. Merchants filed a collection action against the Anglins seeking to collect the debt. In response, the Anglins filed counterclaims alleging violations of the FDCPA, among other things. The county court grant summary judgment to Merchants and entered judgment against Plaintiffs in the amount of $3,490.56. Thereafter, Merchants applied for a writ of garnishment. The court quashed the writ because the Anglins’ counterclaims were still pending and, therefore, there was no final judgment in the matter. Subsequently, the county court held a one-day bench trial on the counterclaim and concluded that Merchants had not violated the FDCPA. The county court then entered final judgment.
The Anglins then filed the instant lawsuit against Merchants, claiming that Merchants violated the FDCPA when it obtained a writ of garnishment before a final judgment in the county court debt collection action. The case was heavily litigated, including an appeal to the Ninth Circuit Court of Appeals. Ultimately, the Anglins filed a Second Amended Complaint, again alleging that Merchants violated the FDCPA when it obtained a writ of garnishment. Merchants filed a motion to dismiss.
The Court first analyzed whether the Rooker-Feldman, res judicata, and claim-splitting doctrines prevented the Court from entertaining Plaintiffs’ Complaint due to the county court’s prior decision regarding the writ of garnishment. Slip Op. at 5. The Court found that, while the claims were related in subject matter, they were otherwise independent. Thus, the Court could consider the claims.
Next, the Court analyzed Plaintiffs’ FDCPA claim. Plaintiffs argued that Merchants was prohibited from obtaining a writ of garnishment until after a final judgment under Washington State’s Civil Rule for Courts of Limited Jurisdiction (“CFLJ”). According to Plaintiffs, by violating this rule, Merchants also violated the following sections of the FDCPA:
- 1692b(6) (communication with third parties),
- 1692(e)(2)(A) (falsely representing the legal status of debt),
- 1692e(5) (threat to take action that cannot or is not intended to be taken),
- 1692e(10) false representation or deceptive means),
- 1692e(13) (falsely representing legal process),
- 1692(f) (use of unfair or unconscionable means), and
- 1692(f)(1) (collection of fees not included in principal obligation).
Id. at 8.
The Court distinguished between a violation of a state court procedural rule and violation of state substantive law. According to the Court, “at worst, Defendants violated a state court procedural rule — not substantive law — when they applied for the writ of garnishment based on the valid, albeit, not final judgment.” Id. at 9. The appropriate remedy? Contest garnishment in the court from which the writ was issued. This is exactly what Plaintiffs did. The county court agreed with Plaintiffs and granted the requested relief by quashing the writ.
The Court cited to the general consensus of courts across the country that “procedural mishaps in state court cannot be the basis for a FDCPA claim.” Id. at 10 (collecting cases). In the Court’s own words, “Defendants’ procedural error was innocuous and, certainly not ‘unconscionable’ in either the legal or lay sense, and as such, cannot be the basis for a FDCPA claim.” Id. Hence, the Court dismissed Plaintiffs’ FDCPA claim.
This case is significant for adding to the collection of cases holding that violations of state procedural rules, such as procedures regarding a writ of garnishment, cannot form the basis for an FDCPA claim against the debt collector. Instead, courts like in this case are holding that borrower’s remedy is in the state court in which the procedural violation occurred – not in federal court through an FDCPA claim.