And The Defense Wins
DRI member Matthew S. Marrone, partner with Lucas and Cavalier, LLC in Philadelphia and chair of DRI’s Professional Liability Committee, secured a dismissal of all claims filed against his client, a lawyer, in the United States District Court for the District of New Jersey. A high-profile consumer rights attorney filed a putative class action suit against the lawyer, who represents creditors in debt collection matters. The plaintiffs were debtors who defaulted on payments to their credit card company and were sued by the debt collecting lawyer on behalf of the company.
The plaintiffs alleged a novel theory against the attorney, who was undisputedly a “debt collector” for purposes of the Fair Debt Collection Practices Acts (FDCPA), 15 U.S.C. § 1692 et seq. The credit card accounts that the plaintiffs maintained were subject to a customer agreement that permitted the credit company to collect court costs, collection expenses and attorneys’ fees in the event the company was required to pursue the cardholders for any amounts owed under the agreements. When the debt collecting attorney filed suit in New Jersey state court against each plaintiff, he sought attorneys’ fees in accordance with this agreement. However, he also sought separate recovery of attorneys’ fees in accordance with a New Jersey court rule which expressly permits them under certain circumstances. The plaintiffs claimed it was a violation of the FDCPA for the lawyer to “double dip” and seek collection of both the “contractual” and “statutory” attorney fees. Alternatively, plaintiffs claimed that seeking recovery of both fees is a misrepresentation of the amount owed, thus constituting a violation of the FDCPA. They also argued that the defendant improperly modified a court-mandated summons.
Attorney Marrone filed a 12(b)(6) motion contending that everything the debt collecting lawyer had done was permitted under New Jersey law and was not a violation of the FDCPA. The lawyer clearly itemized the amounts sought on the complaints against the plaintiffs and did not lump his attorneys’ fees with the amount of the debt owed. Moreover, New Jersey law allows recovery of both fees, if the trial court deems it appropriate. The district court agreed and dismissed the complaint. No appeal was filed.
Plaintiffs’ counsel acknowledged he was attempting to forge a new theory of liability under the FDCPA. While such attempts by consumer rights attorneys are common, the court fortunately rejected it in this case. Had it been successful, thousands of lawyers in the State of New Jersey would have been exposed, as recovery of attorneys’ fees under both contractual and statutory provisions is common. Indeed, the state courts’ own routine practices of awarding them would have come under fire and needed to be revamped. All of this was brought to the district court’s attention, and likely factored into the decision to dismiss.
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