If a collector is communicating with a debtor’s attorney instead of with the debtor, are the communications with the attorney subject to the FDCPA? The answer depends on what circuit you are in. The circuit courts have developed three different approaches to this issue, and several circuits still have not addressed the question.
In Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Cir. 2007), the Fourth Circuit held that the FDCPA does apply to communications between a debt collector and a debtor’s counsel. Id. at 232-33. The debtor in Sayeed alleged that statements made in the collector’s interrogatory responses and in a summary judgement motion – pleadings that had been served upon the debtor’s counsel in a collection lawsuit – violated the FDCPA. Id. at 228-29. The district court granted the defendant’s motion to dismiss, but the Fourth Circuit reversed.
The Sayyed court noted that the FDCPA defines “communication” broadly to include conveying information transmitted “indirectly” to a debtor, and that a “communication to debtor's counsel, regarding a debt collection lawsuit in which counsel is representing the debtor, plainly qualifies as an indirect communication to the debtor.” Id. at 232. The court reasoned that section 1692c(a)(2) of the Act, which mandates that when a debtor is represented, all communications must be made to a debtor’s attorney, is “but another indication that communications with a debtor's attorney with regard to the debt are "communications" as defined and regulated by the FDCPA – and that such communications must in fact be directed to the attorney under the terms of the statute.” Id. at 233.
Finally, the Sayyed court observed that the “communication” at issue in Heintz v. Jenkins, 514 U.S. 291 (1995), was a settlement letter between a collector and the debtor’s attorney. Sayeed, 485 F.3d at 233. According to Sayeed, the Supreme Court had “held” in Heintz that the debtor “had a cause of action under the FDCPA on the basis of statements contained within the letter to her counsel. (Citation). Thus, plainly, the FDCPA covers communications to a debtor’s attorney.” Id.
The Ninth Circuit considered Sayeed and came to the exact opposite result, holding that a communication with a debtor’s counsel is not governed by the FDCPA. See Guerrero v. RJM Acquisitions LLC, 499 F. 3d 926 (9th Cir. 2007). In Guerrero, the debtor argued that a letter sent to the debtor’s counsel, in response to a request for validation of the debt, was subject to the FDCPA. The district court agreed, and later awarded the debtor $2,545.00 in actual and statutory damages, along with $45,237.21 in attorneys fees. Id. at 932. The Ninth Circuit reversed, holding that the letter to the debtor’s counsel was not subject to the FDCPA:
"RJM argued before the court, and amici argued in its brief, that the Act's purpose is to protect unsophisticated debtors from abusive debt collectors, and once a consumer obtains this protection by procuring legal counsel, the Act's protections become superfluous and therefore its provisions no longer apply. We agree. The Act's language and underlying purposes recognize a distinction between a consumer and a consumer's legal counsel. They are distinct legal entities. We therefore hold that the letter directed to the consumer's attorney after receiving notice that the consumer disputed an alleged debt does not violate the Act."
Id. at 929. The Guerrero court noted that “All but one published federal decision to have given reasoned consideration to the question has determined that communications to a debtor's attorney are not actionable under the Act. (Citations).” Id. at 936. The Court rejected the notion that the Supreme Court had “ruled” in Heintz that the FDCPA necessarily applies to communications with a debtor’s counsel. The issue decided by Heintz was much narrower – “The issue before us is whether the term ‘debt collector’ in the [Act] applies to a lawyer who regularly, through litigation, tries to collect consumer debts.” Guerrero, 499 F. 3d att 937 (internal quotation marks omitted; alteration in original). The Guerrero court explained that it was not required to follow “what amounts to, at most, an implicit assumption” in the Heintz decision. Id. at 938.
Guerrero expressly rejected the holding of Sayeed. It noted that Sayeed “did not even acknowledge the great weight of authority holding to the contrary” and that it “relied upon the implicit assumption by the Supreme Court in Heintz, which we find inappropriate for the reasons just discussed.” Id. at 938. Guerrero notes that the language of section 1692c(a)(2) of the Act did not support Sayyed court’s reasoning and actually “cuts in the opposite direction, however, because it demonstrates that the Act contemplates different roles for, and different treatment of, attorneys and their debtor clients. Section 1692c(a)(2) actually reinforces our view that Congress treated attorneys as intermediaries between debtors and debt collectors, and that a debtor's attorney does not require the same protections as a debtor himself.” Id.
Yet another approach was adopted by the Seventh Circuit in Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir. 2007). The Evory court determined that the FDCPA does apply to communications made to a debtor’s counsel, but held that the “unsophisticated consumer” standard was not appropriate when evaluating those communications. Id. at 774. The Evory court fashioned a new standard for communications made to attorneys, holding that “a representation by a debt collector that would be unlikely to deceive a competent lawyer, even if he is not a specialist in consumer debt law, should not be actionable.” Id. at 775. The court noted that “false” statements may be more likely to mislead a competent attorney, since the attorney may be unable to discovery the falsity without an investigation that his client cannot afford to undertake. Id.
Given this three-way split between Sayeed, Guerrero and Evory on the issue of whether communications between a collector and a debtor’s counsel are covered by the FDCPA, it seems certain that debtors will continue to pursue this theory of recovery in circuits that have not adopted the Guerrero approach.
[Note: this post is an updated version of article that appeared in the September 2007 MAP Bulletin]