By Lisa Lee, Esq.

KML Law Group *

USFN Member (NJ, PA)

On February 7, 2022, Judge Joshua D. Wolson of the U.S. District Court for the Eastern District of Pennsylvania issued an opinion that bucked what seemed to be a positive trend for debt collectors and letter vendors alike in the wake of the Hunstein decisions.

The opinion came in support of the denial of a Motion to Dismiss filed by the debt collector defendant in the case of Khimmat v. Weltman, Weinberg and Reis, Co., E.D. Pa. No. 21-CV-02944-JDW. The facts of the case are simple and will sound all too familiar to those following Hunstein, and the line of copycat cases that sprung up around it. The defendant firm was hired by a creditor of the plaintiff to collect a credit card debt, and sent a letter, through a letter vendor, to the plaintiff. The firm provided information about the debtor and the debt to the letter vendor in an electronic file. The plaintiff debtor sued alleging a violation of the FDCPA, specifically section 1692c(b).

The Court drilled down on and discussed three specific words and terms in section 1692c(b). All throughout its analysis, the court was clear, in its view, there was no ambiguity in the language used by Congress in 1692c(b), and the plain meaning of the words and phrases at issue could compel only one result.

First, the court concluded the firm undoubtedly “communicated” information about the debt to its letter vendor, and in doing so dismissed the argument the letter vendor itself was a “medium” through which communication could be made in a way that would not violate the FDCPA. Instead, the court concluded the communication was made with the letter vendor through the medium of an electronic communication.

Next, the court decided the communication was “in connection with the collection of any debt,” reading the phrase more broadly than the firm argued it should have been read, and reasoning “commonsense dictates” the firm made the communication in connection with the collection of a debt.

The court then analyzed the phrase “with any person.” The Court rejected the argument the letter vendor was an agent of the debt collector. On this point, the court reasoned the section provides specific exception for certain types of agents – attorneys – and the exclusion of other types of agents necessarily means they are not excluded at all. The court also went on to say there was no evidence at the stage the letter vendor was an agent of the debt collector. On this point, the court left a small opening for the defendant firm when it noted discovery could show the letter vendor did not read the information they were provided, and merely processed it, which would allow the parties to “return to the issue … if appropriate.”

The court also dismissed the firm’s First Amendment arguments, and those centered on FTC and CFPB guidance that seemingly blesses the use of letter vendors in debt collection. The court was not convinced by these arguments and returned to its conclusion that the plain language of the statute was not open to interpretation, and any deviation from the plain language would have to come from Congress itself.

@Copyright 2022

USFN Report - Spring 2022