After lengthy discovery and litigation, a U.S. district court judge in the Western District of New York ended a class action lawsuit by holding that communications between attorneys are not actionable under the Fair Debt Collection Practices Act (FDCPA). In (Fein Such), the plaintiffs filed a class action complaint alleging that Fein Such made improper attempts to collect debts in violation of the FDCPA and New York General Business Law (GBL). The communications were made in connection with various foreclosure proceedings against the plaintiffs where Fein Such represented the foreclosing entity. The plaintiffs alleged that Fein Such improperly contacted them regarding attorneys’ fees and costs purportedly incurred in connection with the foreclosure proceedings. The plaintiffs alleged that Fein Such sent them notices demanding payment of fees that were not earned and costs that were not incurred. All communications were between Fein Such and the plaintiffs’ respective attorney and no communications were sent directly to any of the plaintiffs.
The court first addressed confusion regarding the Second Circuit’s pronouncements on attorney communications under the FDCPA. In dicta in Kropelnicki v. Siegel, 290 F.3d 118 (2d Cir. 2002), the Second Circuit noted that “alleged misrepresentations to attorneys for putative debtors cannot constitute violations of the FDCPA.” However, confusion remained regarding whether communications between attorneys are automatically excluded from the FDCPA or whether attorney representation is merely a factor to be considered under Gabriele v. American Home Mortgage Servicing Inc, 503 F. App’x 89 (2d Cir. 2012).
Specifically, the court disagreed with the prior judge in the case on the proper interpretation of Gabriele. The prior judge concluded that Gabriele indicated a factors test should be used rather than a bright line rule regarding attorney communications. The court in White ultimately looked to specific language in Gabriele to conclude that communications “would not mislead the least sophisticated consumer, particularly [a consumer] represented by counsel.” To read more click here.