For the lawyers unfamiliar with this doctrine, imagine a scenario where your client’s adversary could sue you directly, claiming you were not “meaningfully involved” when you were handling a matter for your client. How could this third party possibly have standing to sue you based on the process that you determined was appropriate for representing your client? Would any court tolerate such a claim? If the claim were allowed to proceed, how would you defend against it while still preserving the attorney-client privilege and your client’s confidences?
Although this scenario may sound far-fetched, it is an everyday occurrence for creditors’ rights attorneys, who have been targeted by “meaningful attorney involvement” lawsuits for years. Indeed, the “meaningful attorney involvement” theory has been embraced by the Consumer Financial Protection Bureau (“CFPB”) in its enforcement actions against large creditors’ rights law firms. The CFPB is expected to announce proposed debt collection rules in the near future that may incorporate the theory.
These lawsuits and regulatory actions are a threat to the core principles underlying the attorney-client relationship. All attorneys, and their clients, should be united in fighting against the continued use and expansion of the “meaningful attorney involvement” theory. If this can happen to creditors’ rights attorneys and their clients, might you and your clients be next?
What Is It Like To Be Named In A “Meaningful Attorney Involvement” Suit?
For those lawyers who are unfamiliar with “meaningful attorney involvement” lawsuits, consider for a moment what it would be like to be named as a defendant in one.
Imagine a week in the office that starts off on a positive note. You land a big new client, who owns a valuable trademark and tells you a competitor has been infringing it. The client provides you with information about the claim. Applying your expertise and years of training, you quickly conclude the client has good faith basis for alleging trademark infringement. You draft a letter to the competitor, stating the facts as you understand them, demanding that the infringement cease and desist, and inviting the competitor to call you to discuss a resolution. All is well.
At the end of that week, however, things go sour. A process server knocks on your office door, and hands you a copy of a summons and a federal court complaint. You are personally named as a defendant. Your law firm is also named a defendant. Your client’s competitor never responded to your demand letter, but the competitor has now sued you and your firm. What is the claim?
The complaint alleges that your demand letter was false and misleading, because you were not “meaningfully involved” in reviewing your client’s files before you sent the letter on your client’s behalf. The competitor does not deny that it infringed your client’s trademark. Rather, the competitor is suing you and your firm because you allegedly determined too quickly that the infringement had occurred. The complaint seeks damages and attorney’s fees. It is served along with discovery requests, asking you to turn over all of your client’s files. A notice of your deposition is served, where your client’s adversary plans to ask you questions about what you did before you sent the letter.
This scenario sounds completely outrageous, right? We can assume this case will get bounced out of federal court immediately, right? No judge would ever seriously entertain such an obvious shakedown, right?
To the contrary, this is a real description of the “meaningful attorney involvement” lawsuits that are currently being litigated in courts across the country. Welcome to everyday life as a creditors’ rights attorney.
Where Does The “Meaningful Attorney Involvement” Doctrine Come From?
How could the “meaningful attorney involvement” doctrine have ever gotten off the ground? It makes no sense. The communications between the lawyer and the client concerning the basis for the client’s claim are plainly privileged. The nature of review conducted by an attorney before a demand letter is sent is also privileged. The attorney gets to decide, in consultation with the client, and based on the attorney’s professional judgment, what to review and how long to review it before sending a demand letter. There is no viable way for a third party to file a lawsuit against an attorney based on this process.
How, then, can the adversary of the attorney’s client file an independent federal court action against the attorney, and claim the attorney was not “meaningfully involved” in sending the demand letter? How did everything go wrong for creditors’ rights attorneys?
The “meaningful attorney involvement” doctrine evolved out of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the “FDCPA”). You can read the entire FDCPA from front to back, however, and you will not find the term “meaningful attorney involvement” defined or even mentioned anywhere in the statute. Instead, you will come across section 1692e(3) of the FDCPA, which contains a simple rule: a debt collector may not make a “false representation or implication that any individual is an attorney or that any communication is from an attorney.” 15 U.S.C. § 1692e(3). In other words, if you are not a lawyer, the FDCPA prohibits you from falsely stating or implying that you are a lawyer. This is a sensible and uncontroversial prohibition.
The early “meaningful attorney involvement” cases did not even involve letters mailed by attorneys. Instead, the letters had been mailed by collection agencies that had used an attorney’s letterhead in a misleading fashion. In Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993), a collection agency sent letters to “approximately one million debtors each year” using a computerized mass-mailing system, on letterhead listing “P.D. Jackson, Attorney at Law, General Counsel, NCB Collection Services,” and containing a mechanically-reproduced “signature” of an attorney. Clomon, 988 F.2d at 1316-17. But the attorney “played virtually no day-to-day role in the collection process” – he never reviewed the letters, and never decided whether or when the collection agency should mail them. See id. The Court concluded the letters were not “from” the attorney “in any meaningful sense of the word.” Id. at 1320.
Similarly, in Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996), a collection agency owned by an attorney generated and mailed letters on attorney letterhead “‘signed’ with a mechanically reproduced facsimile” of the attorney’s signature. Avila, 84 F.3d at 225. Nearly 270,000 letters were mailed each year, and the attorney had not personally prepared, signed, or reviewed any of them. See id. The Court observed that “Rubin has no real involvement in the mailing of dunning letters to debtors,” id. at 228, and that the “true source of the ‘attorney’ letters was a collection agent who pushed a button on the agency’s computer.” Id. at 230.
Clomon and Avila thus did not involve letters “from” an attorney. The letters were mass-produced by collection agencies and designed to appear as if they came from attorneys. Over time, however, consumer advocates convinced some courts to use the Clomon and Avila decisions to support “meaningful attorney involvement” claims regarding letters that were, in fact, mailed by attorneys. See, e.g., Nielsen v. Dickerson, 307 F.3d 623, 635 (7th Cir. 2002) (attorney’s letter violated section 1692e(3) where attorney had not “meaningfully involved himself in the decision” to send letter); Lesher v. Law Offices Of Mitchell N. Kay, 650 F.3d 993, 1003 (3d Cir. 2011) (letter from law firm violated section 1692e where it “falsely impl[ied] that an attorney, acting as an attorney, is involved in collecting Lesher's debt.”).
As this disturbing trend in the case law continued, some courts allowed litigants to take invasive discovery regarding the process used by an attorney when evaluating and preparing a demand letter for the client. See, e.g., Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 307 (reversing summary judgment in favor of attorneys on “meaningful involvement” claim to allow plaintiff to take discovery on “precisely what information the [attorneys] reviewed, how much time was spent reviewing plaintiff's file, and whether any legal judgment was involved with the decision to send the letters and ultimately to initiate litigation . . .”).
The “meaningful attorney involvement” doctrine subsequently expanded beyond demand letters, and has been applied in cases that challenge the process used to prepare pleadings that were, in fact, filed by attorneys. See, e.g., Bock v. Pressler & Pressler, LLP, 30 F. Supp. 3d 283 (D.N.J. 2014).
Can The Federal Government Target Me And My Clients Using The “Meaningful Attorney Involvement” Doctrine?
Fighting off “meaningful attorney involvement” cases filed by consumer attorneys is incredibly expensive and disruptive. But what would it be like if the federal government targeted you and your clients using this theory? Well you can creditors’ rights attorneys, who are already painfully aware of the answer to this question.
The Consumer Financial Protection Bureau (“CFPB”) has targeted large creditors’ rights law firms using the “meaningful attorney involvement” theory, and beginning in 2016, the CFPB announced a series of consent orders with the firms that imposed specific requirements on the information and documentation those attorneys must review before sending collection letters or filing collection lawsuits on behalf of their clients. See, e.g., Consumer Fin. Prot. Bur. v. Frederick J. Hanna & Assocs, et al., United States District Court, Northern District Of Georgia, Case No., 1:14-cv-02211-AT, Docket 61-1, Stipulated Final Judgment and Order; In the Matter of: Pressler & Pressler, LLP, et al., Administrative Proceeding File No. 2016-CFPB-0009; In the Matter of: Works & Lentz, Inc., et al., Administrative Proceeding File No. 2017-CFPB-0003.
In a rare victory for creditors’ rights attorneys, a law firm recently defeated a “meaningful attorney involvement” action filed by the CFPB following a four-day trial. See Consumer Fin. Pro. Bur. v. Weltman, Weinberg & Reis Co., L.P.A., 2018 WL 3575882 (N.D. Ohio July 25, 2018). The government had not alleged that the letters sent by the law firm included false statements about the amount that the consumers owed. Instead, the CFPB claimed the letters “falsely imply that an attorney was meaningfully involved in the collection of the debts to which the letters relate.” Id. at *2.
After days of detailed testimony from members of the law firm regarding the procedures they employed for their clients prior to generating and mailing demand letters, the court held the firm had proven that “attorneys were meaningfully and substantially involved in the debt collection process both before and after the issuance of the demand letters.” Id. at *11. When the Weltman firm subsequently sought to recover the attorneys’ fees it had spent defending the case, however, the court denied the motion. See Consumer Fin. Prot. Bur. v. Weltman, Weinberg & Reis Co., L.P.A., 2018 WL 5257602 (N.D. Ohio Oct. 22, 2018).
Why Every Lawyer And Client Should Fight Against The Spread Of The “Attorney Meaningful Involvement” Doctrine
All attorneys, and their clients, should be disturbed by the evolution of the “meaningful attorney involvement” and its implications for the legal profession. Lawyers who do not have a creditors’ rights practice may be tempted to dismiss the theory as an anomaly, a unique risk that was knowingly assumed by a limited group of practitioners who are subject to the FDCPA. But it is important to remember that the phrase "meaningful attorney involvement" is not contained anywhere in the plain language of the FDCPA. Indeed, the “meaningful attorney involvement” doctrine arose from cases that did not even involve letters sent by attorneys.
The FDCPA does not give consumers, federal courts, or federal regulators the power to regulate the private interactions between a creditors’ rights attorney and the client. The judiciary, not Congress, establishes professional standards for the bar and oversees the conduct of attorneys. See Paul E. Iacono Structural Eng'r, Inc. v. Humphrey, 772 F.2d 435, 439 (9th Cir. 1983) (“[T]he regulation of lawyer conduct is the province of the courts, not Congress.”). This is a point that has been emphatically demonstrated by litigation initiated by the American Bar Association against the Federal Trade Commission. See ABA v. FTC, 430 F.3d 457, 472 (D.C. Cir. 2005) (rejecting argument that Congress gave FTC the power to regulate attorneys under Gramm-Leach Bliley Act: “Congress has not made an intention to regulate the practice of law ‘unmistakably clear’ in the language of the GLBA”) (citations omitted).
All attorneys and their clients should reject the “meaningful attorney involvement” doctrine. It has morphed into an undefined standard of care that gives consumers and federal regulators a license to challenge all aspects of a creditors’ rights attorney’s representation of the client. The FDCPA was not passed by Congress as a means to regulate the practice of law or to dictate the relationship and workflow between a client and an attorney. Clients and lawyers have the right to decide what level of attorney review or “involvement” is appropriate for collection matters. No federal statute, including the FDCPA, should be misinterpreted in a way that so fundamentally interferes with the attorney-client relationship.