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.