Grappling
with the meaning of the so-called “meaningful involvement” doctrine is one of
the most elusive and frustrating compliance challenges for collection attorneys
and their clients. What exactly must a
collection attorney do to ensure they are “meaningfully involved” in a file
before sending a collection letter to a consumer? When, if ever, should collection law firms
include disclaimers on their collection letters, indicating that no attorney of
the firm has reviewed the particular circumstances of the debtor’s file? What steps must an attorney take to be
“meaningfully involved” when filing a collection lawsuit? What role, if any, should a creditor client
play in setting standards for the attorneys who collect on its behalf?
Finding the right answers to these
questions is difficult, and the stakes can be extremely high. Courts across the country, and regulators
like the Consumer Financial Protection Bureau (“CFPB”), have insisted that
collection attorneys be “meaningfully involved” in reviewing the accounts they
handle for their creditor clients, and that creditors are responsible for
ensuring their attorneys are complying with the consumer protection laws. In the past two years, the CFPB has imposed
consent orders on large collection law firms and debt buyers, in part because
the Bureau has taken issue with the level of attorney involvement in the
collection process. Consumer attorneys,
meanwhile, routinely assert “meaningful involvement” claims in FDCPA lawsuits
filed against collection attorneys and their clients.
Adding to the confusion, some court
decisions, and a recent CFPB consent order, have recognized that in some
circumstances, collection attorneys may include “disclaimers” in their
collection communications to indicate that no attorney has yet been
meaningfully involved in reviewing the particular circumstances of the
consumer’s account. How can these
authorities be reconciled? If the
requirement for “meaningful involvement” is truly meaningful, can it safely be
disclaimed away?
The Origins Of Meaningful Involvement
First, a brief history lesson is in
order. What exactly is the “meaningful
involvement” doctrine anyway? If you
have read the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), from beginning to
end, you are probably still looking for the phrase “meaningful
involvement.” You can stop looking,
because it is not in the Act. Section
1692e(3) of the FDCPA contains a simple prohibition: collectors may not make any “false
representation or implication that any individual is an attorney or that any
communication is from an attorney.” 15
U.S.C. § 1692e(3). The meaningful
involvement doctrine was created by judicial decisions that have slowly
stretched the plain language of this section beyond recognition.
Courts have expanded section 1692e(3)
to imply a broader mandate that collection attorneys be “meaningfully involved”
in the review of a consumer’s file before a collection letter is sent. See,
e.g., Clomon v. Jackson, 988 F.2d
1314, 1320-21 (2d Cir. 1993); Avila v.
Rubin, 84 F.3d 222, 228-29 (7th Cir.
1996). This “meaningful involvement”
doctrine has slowly morphed into a theory used by consumer attorneys, and later
by regulators, to second-guess not only the collection letters mailed by
attorneys, but also the methods used by collection attorneys when preparing and
filing state court lawsuits. The
doctrine has now become a vehicle for courts and juries to decide on an ad hoc basis what collection attorneys
must do when representing their clients.
Defining Meaningful Involvement
Given that courts and regulators have
insisted collection attorneys must be “meaningfully involved” when sending
letters and filing lawsuits, it is reasonable to assume there is a universal
set of requirements attorneys can follow in order to be compliant. Wrong.
There are many examples of what is not “meaningful involvement,”
but no court or regulator has set out any definitive standards or procedures an
attorney can follow in order to ensure compliance.
For example, in Clomon the defendant, an attorney, was a part-time general counsel
of a collection agency. The agency (not
the attorney) mailed letters to “approximately one million debtors each year”
using a computerized mass-mailing system, with a letterhead referencing the
defendant – “P.D. Jackson, Attorney at Law, General Counsel, NCB Collection
Services” – and defendant attorney’s mechanically-reproduced “signature.” Clomon,
988 F.2d at 1316-17. The attorney never
reviewed the letters, and never decided whether or when the agency should mail
them. See id. The text of the
letters falsely suggested defendant had personally reviewed Clomon’s case and
had advised his client litigation was a real possibility. See id.
at 1317.
Similarly, in Avila, a collection agency – not an attorney – mailed letters on an
attorney’s letterhead “‘signed’ with a mechanically reproduced facsimile” of
the attorney’s signature. Avila, 84 F.3d at 225. The agency mailed nearly 270,000 similar
letters each year – roughly 1062 each working day. See id. The attorney, Rubin, had not personally
prepared, signed, or reviewed any of these letters. See id. All of the letters threatened suit, but the
Seventh Circuit observed it was “unclear (but we think doubtful) whether [Rubin
& Associates] litigate anywhere,” id.
at 224, and noted that “Rubin is not personally or directly involved in
deciding when or to whom a dunning letter should be sent,” id. at 228.
The attorney-defendant in Nielsen v. Dickerson, 307 F.3d 623, 635
(7th Cir. 2002), was completely uninvolved in the letter process. The Court held that the creditor
client – Household Bank – had violated the FDCPA, because the bank was the
“true source” of the letters sent using the attorney’s name. See id.
at 639. The defendant attorney “did not
make the decision to send a letter to a debtor; Household did.” Id.
at 635. The attorney had no “involvement
with the file of any debtor slated to receive his form letter and played no
meaningful role in the decision to send a debtor such a letter.” Id.
Without even trying to establish a
standard for complying with the “meaningful involvement” doctrine, cases like Clomon, Avila, and Nielsen held
that the FDCPA was violated. One court
that at least tried to establish a “test” of sorts was Bock v. Pressler & Pressler, LLP, 30 F. Supp. 3d 283 (D. N.J.
2014). There, the court held a law firm
violated the FDCPA by making an “implied representation that an attorney was
meaningfully involved in the preparation of the complaint.” Id.
at 303. Even though none of the claims
made against the debtor in the underlying state court complaint were alleged to
be false, the district court nonetheless found an FDCPA violation, because the
attorney who reviewed the complaint did not spend enough time doing so. See id.
at 305-06. The court held that a
collection complaint is “inherently” false and misleading, unless, at the time
of signing it, the attorney “1) drafted, or carefully reviewed, the complaint;
and 2) conducted an inquiry, reasonable under the circumstances, sufficient to
form a good faith belief that the claims and legal contentions in the complaint
are supported by fact and warranted by law.”
Id. at 304. Although the Bock court at least attempted to establish a standard governing the
“meaningful involvement” doctrine, the court provided zero guidance for what an
attorney would need to do in order to meet the standard it had articulated.
Disclaiming Meaningful Involvement
Can a collection attorney avoid
liability under the “meaningful involvement” doctrine by including a disclaimer
in the collection letter, informing the consumer that no attorney of the firm
has conducted any meaningful review of the file? The answer is unclear.
In Greco
v. Trauner, Cohen & Thomas, 412 F.3d 360 (2d Cir. 2005), the letter was
on the law firm letterhead, but was not signed by any attorney. On the front of the letter, in addition to
the language required by section 1692g of the FDCPA, the following statement
was included: “At this point in time, no attorney with this firm has personally
reviewed the particular circumstances of your account. However, if you fail to contact this office,
our client may consider additional remedies to recover the balance due.” Id.
at 361. The Court rejected plaintiff’s
claim that the letter violated the FDCPA, noting that an attorney can send a
collection letter to a consumer “without being meaningfully involved as an
attorney within the collection process, so long as that letter includes disclaimers that should make clear even
to the ‘least sophisticated consumer’ that the law firm or attorney sending the
letter is not, at the time of the letter’s transmission, acting as an
attorney.” Id. at 364. The Court held
that “the defendant’s letter included a clear disclaimer explaining the limited
extent of their involvement in the collection of Greco’s debt.” Id.
at 365; see also Jones v. Dufek, 830
F.3d 523 (D.C. Cir. 2016) (no FDCPA violation where law firm used Greco disclaimer on front of letter
stating: “Please be advised that we are acting in our capacity as a debt
collector and at this time, no attorney with our law firm has personally
reviewed the particular circumstances of your account.”).
Portions of the CFPB’s recent consent
order with the Works & Lentz law firm suggest that the Bureau approves of
the use of a Greco-type disclaimer in
some circumstances. In the Findings and
Conclusions recited in the Order, the CFPB alleged that the firm had violated
the FDCPA by, among other things, sending letters to consumers that “did not
include any disclaimer to alert Consumers that no attorney had review their
account prior to the initial demand being mailed.” See
In the Matter of: Works & Lentz, Inc., et
al., Administrative Proceeding File No. 2017-CFPB-0003 (“Order”) para.
12-14, 18-23. The Consent Order mandates
that in the future, whenever the firm sends a letter to a consumer and no
attorney has been “meaningfully involved in reviewing the Consumer’s account”
and no attorney has “made a professional assessment of the delinquency,” the
letter must “a. Clearly and prominently disclose that no attorney has reviewed
the Consumer account at issue; b. State in the signature block that the letter
is from the Collection Department; and c. Omit the name of any attorney and the
phrase “Attorney at Law” from the signature block of any Demand Letter.” Id.
at para. 44. At best, then, the Order
suggests an attorney can send a collection letter without being “meaningfully
involved” in an account, but it provides no definitive guidance for how
attorneys can discharge their “meaningful involvement” obligations. Nowhere in the Order does the CFPB explain
what is required for an attorney to be “meaningfully involved in reviewing the
Consumer’s account” or what an attorney must do in order to make “a
professional assessment of the delinquency” on an account.
Including a disclaimer of attorney
involvement in a collection letter does not always insulate an attorney from
liability under the FDCPA. For example,
in Gonzalez v. Mitchell N. Kay, 577
F.3d 600 (5th Cir. 2009), the letter was sent on law firm letterhead but was
not signed. The front of the letter
included the section 1692g notice, and directed the reader to “Please see
reverse side for important information.”
Id. at 602. On the back of the letter was a notice
stating: “At this point in time, no attorney with this firm has personally
reviewed the particular circumstances of your account.” Id. The court noted that the debtor “would not
learn that the letter was from a debt collector unless the consumer turned the
letter over to read the “legalese” on the back. The disclaimer on the back of
the letter completely contradicted the message on the front of the letter-that
the creditor had retained the Kay Law Firm and its lawyers to collect the debt.” Id.
at 607. The Court therefore reversed the
district court’s holding that the plaintiff had failed to state a claim for
relief under the FDCPA.
Similarly, in Lesher v. The Law Offices Of Mitchell N. Kay, 650 F.3d 993 (3d Cir.
2011), the Court held that settlement letters sent on a law firm’s letterhead
with the Greco disclaimer on the
reverse side of the letter violated the FDCPA.
According to the Court, “the least sophisticated debtor, upon receiving
these letters, may reasonably believe that an attorney has reviewed his file and
has determined that he is a candidate for legal action.” Id.
at 1003. The letters “raise[d] the
specter of potential legal action,” and were therefore false and misleading
because the firm was not acting in a “legal capacity” when it sent the letters. Id.
Where does all of this leave us? The answer is a clear as mud. The “meaningful involvement” doctrine does
not appear in any statute, rule, or regulation.
What exactly does it require of attorneys who seek to comply with
it? When can attorneys disclaim it? What, if anything, should clients insist upon
from their collection attorneys? This
judicially-created doctrine has been around for the twenty-four years, and has
been widely embraced by many courts and by regulators. Despite this, collection attorneys are still
at a loss as to what they must do to comply with these unwritten requirements,
and it remains unclear whether a “disclaimer” of attorney involvement will
always be accepted. Collection attorneys
and their clients must continue to do their best to piece together all
available authority on how to comply with this amorphous doctrine.
