Collection Attorneys Must Conduct "Meaningful Review" of Suits Under FDCPA: Federal Judge

A U.S. District Judge last week ruled that a debt collection law firm violated the Fair Debt Collection Practices Act (FDCPA) by not conducting a “meaningful review” of a collection action filed against a consumer. The judge used reasoning from the landmark case Lesher, decided three years ago.

Judge Kevin McNulty, in the District of New Jersey, granted the plaintiff summary judgment in Bock v. Pressler & Pressler. At issue was the level of involvement on the part of the Pressler attorney that signed off on the civil debt collection suit against Bock.

Bock ran up charges on a credit card and owed money to the issuer bank. His debt was purchased by Midland Funding LLC which in turn engaged Defendant Pressler and Pressler to collect the debt. Pressler sent Bock a collection letter, and then, on Midland’s behalf, filed a complaint against Bock in the Superior Court of New Jersey. That state action was settled, but while it was pending, Bock filed a federal court action against Pressler in which he alleged that Pressler made a false or misleading representation in violation of the FDCPA (15 U.S.C. § 1692e) by filing the state complaint without meaningful review by an attorney.

McNulty last week was ruling on the parties’ cross-motions for summary judgment.

The judge said that the facts surrounding “Pressler’s preparation of Midland’s complaint against Bock are critical, but virtually undisputed.” The investigation found that much of the work done on any case filed by Pressler is conducted by non-attorneys, a point with which McNulty finds no issue. But when it came time for an attorney to review the case before it was filed in court, the computer system used by the firm showed Bock’s file was accessed for only four seconds.

In summary, McNulty wrote, “The process by which Pressler prepares complaints almost entirely involves automation and non-attorney personnel. There is nothing wrong with that; the FDCPA does not mandate drudgery or enshrine outmoded business methods. The state court complaint filed in the state action here, however, was reviewed by an attorney for approximately four seconds. The case law is sparse, and it is possible for reasonable people to disagree as to what constitutes reasonable attorney review. But whatever reasonable attorney review may be, a four-second scan is not it.”

Part of his legal decision hinged on the standards set forth in the Third Circuit Court case Lesher v. The Law Offices Of Mitchell N. Kay in 2011. McNulty’s district is in the Third Circuit.

McNulty wrote that Lesher “establishes that it is false and misleading, within the meaning of FDCPA, for an attorney to send a debt collection letter without having meaningfully reviewed the case.”

But the Lesher case sparked controversy because the specifics of the case called into question whether the attorney was acting in an official legal capacity, unlike the facts in the Bock case.

At any rate, the Bock case is sure to have a chilling effect on collection law firms, especially those operating in the Third Circuit.