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FDCPA Exclusion for Litigating Attorneys

posted by Jason Kilborn

On the heels of oral arguments in the latest Supreme Court case concerning application of the Fair Debt Collection Practices Act to lawyers, ABA President Bob Carlson has a comment in Bloomberg Law today {subscription maybe required} explaining succinctly why litigating lawyers should be excluded from the FDCPA. He carefully distinguishes lawyers collecting debts outside the litigation context (pre-filing)--whom the FDCPA might reasonably regulate--but he convincingly argues for exemption for those involved in active litigation (I would hope and presume this applies to both the pre-judgment and post-judgment stages, the latter being the subject of a little book on judgment enforcement I've just written, including a bit about the FDCPA). The courts provide adequate oversight and abuse prevention in this formal collection context, Carlson argues, and the "gotcha" pitfalls for otherwise innocuous behavior in the FDCPA (especially the required "mini-Miranda" and validation notices) are unjustifiable as applied to court-supervised litigating lawyers. We'll see how warm a reception HR 5082 receives in Congress. 


I used to think that Bob Carlson was right. I no longer do. The reason is simple. Court-ordered sanctions are discretionary and do not necessarily result in a remedy that benefits the harmed consumer, as opposed to a fine being paid into the court. FDCPA includes not just damages, but fee-shifting as a matter of law, which is critical for ensuring that rights are vindicated. Moreover, a consumer can bring an FDCPA claim along with other claims, including as part of a class action; a sanctions motion is going to be a separate motion in litigation in which the individual consumer is the defendant. The lack of parallelism between FDCPA and judicial sanctions makes judicial sanctions a poor substitute for FDCPA.

With all due respect to the president of the ABA:

In practice, the courts provide almost no protection to alleged debtors from FDCPA violations by litigating attorneys. That they're charged with doing so doesn't mean they do — especially in small-claims-type actions. I've personally observed far too many abuses committed by "litigation attorneys" in the course of "litigating" debt collection matters that are entirely ignored by courts, both when specifically brought to courts' attention and when concerning low-income pro se (alleged) debtors.

If lawyers want to be treated as "special," they need to have actually enforced rules that justify that special treatment — not just aspirational statements and delegation to overworked judges.

I could not agree with the other comments more. To say that judicial sanctions are a good enough substitute for the FDCPA ignores the realities on the ground. As others point out, Rule 11-style sanctions are discretionary and only reluctantly awarded by judges. In addition, a very large number of debt collection actions (at least in my state) are handled in small claims courts, which are presided over by non-judges. It is unclear if judicial sanctions are even available at all in these contexts.

It also disappoints me to hear violations of the mini-Miranda and validation requirements by lawyers described as "innocuous behavior", as if there is no consumer protection reason behind those requirements. I have spoken to many consumers who mistakenly thought that lawyers representing debt buyers in court were actually court employees, precisely because those lawyers did not give a mini-Miranda that would inform consumers otherwise.

Validation is also one of the main ways to resolve a debt collection matter without resorting to litigation, especially in the case of mistaken identity. A consumer is often only able to convince a law firm that they are suing the wrong person after pointing out flaws in their documentation of the debt. Validation provides a way for consumers (most of whom proceed pro se) to get access to these documents through a straightforward letter, instead of by drafting their own discovery requests. There are reasons behind these requirements, and I think to imply otherwise betrays a lack of experience working with consumers who have debts in collection.

I have seen all of the following things occur with no greater judicial sanction than harsh words, if that:
1. Garnishing the wages of the wrong person, then arguing (incorrectly) that the consumer waited too long before raising the issue.
2. Filing suit on behalf of an unlicensed entity (where licensure is a precondition for suit)
3. Filing suit using the incorrect form, thus evading the kind of scrutiny intended by the courts.
4. Filing the same claim a second time after a with prejudice dismissal
5. Seeking a default judgment for failure to respond to discovery, in a case where discovery was not permitted.

Perhaps Mr. Carlson had in mind the kind of treatment sophisticated litigants represented by big law firms receive - where the court acts as a referee, sanctioning the attorneys who prove more zealous than honest. But that just isn't the reality of cookie cutter debt collection suits, where one side is chronically under represented. Many violations go entirely unnoticed by the courts, even ones that seem obvious, and the consequences when one is brought to light are negligible.

Permit me to weigh in on the matter of consumer debtors from the trenches in Texas, as a member of the public, rather than an attorney. In this case, the distinction matters greatly, because of the vested industry interests.


The move to give collection lawyers even greater immunity by exempting them from the FDCPA is terrible from a public policy and ethical perspective (normative), and the notion that pro se defendants can hold attorneys accountable with motions for sanctions (TRCP rule 13 in Texas, rather than rule 11) is patently ludicrous, at least in the Texas judicial system (empirical).


Alas, the Texas Supreme Court has taken the doctrine of judicial proceedings privilege--historically a defense to defamation claims based on witness testimony and such--and turned it into an attorney-specific industry-wide civil tort immunity for Texas attorneys.

Flash your bar card and be off the hook.

Worse, the same court has recently allowed attorneys to invoke the Texas Citizen Participation Act (the Lone State version of anti-SLAPP) to slapp nonclients who exercise their own right to petition by suing them, thereby turning the citizen participation rationale of the Act on its head. Youngkin v. Hines, No. 16-0935 (Tex. April 28, 2018).

So now, Lone State attorneys are not only immune from being sued, they get to retaliate against the victims of their wrongdoing—wrongdoing committed in the course of their lawyering--by sticking the victims with attorney’s fees incurred in defending a lawsuit brought to hold them accountable for fraud or other misconduct. Such lawsuits are necessarily legally baseless because the defendant belongs to an occupational class the state supreme court has seen fit to declare immune—i.e. beyond the reach of civil courts--using its power to change the common-law. The facts about any abuse or misconduct no longer matter and won’t be tried. The only fact issue will be the amount of attorneys to be imposed as a punishment on the wronged Texas citizens who dared to sue a member of the Texas Bar.

But why should Texas attorneys complain about the TCPA being turned into an industry-protection tool and a money-maker? It is, after all, non-attorneys that suffer the adverse consequences of the grant of status-based immunity.

The only remedy against attorney misconduct still available to an affected sub-segment of the lay public are the FDCPA and the Texas Debt Collection Act (TDCA). But those only function thanks to the attorney fee provisions in them, which incentivize private enforcement, and provide a small niche of consumer defense attorneys (and legal aid organizations) with an additional source of revenue.

Almost by definition, debt suit defendants are broke. If they weren’t, they would have settled the debt, and would not end up being sued. Most cannot afford attorney representation, and unlike in wreck and other PI cases, there is no contingent fee to make that attorney rich, or at least allow him or her to make a living, pay the bills. The only meaningful incentive to take a case of an indigent debt-suit defendant are the statutory attorney’s fees available when the defendant has a potentially viable claim of having been the target of wrongful debt collection acts or practices.


I recently embarked on a project to help debtors with amicus briefs in several Wells Fargo credit card collection cases and one by Discover Bank. They were all appeals by debtors who had judgments entered against them, and the purpose of the amicus brief was to allow the pro se appellant to copy the brief or incorporate it by reference. Since I have worked behind the scenes for a consumer debt defense law firm for years, and have ghostwritten many briefs, motions, and motion responses, I was in a position to identify some potentially viable appealable issues and arrange them into proper sequence and form.

Here is what has happened so far:

In one low-value credit card debt case, Wells Fargo declared the judgment released but the court of appeals dismissed the case for want of prosecution because the pro se appellant had not filed a brief, rather than because the release had rendered the pending appeal moot. Leard v. Wells Fargo Bank, N.A. No. 14-18-00779-CV (Tex.App.- Houston [14th Dist.], Jan. 10, 2019) (mem op. dismissing appeal for want of prosecution).


In a second case, Wells Fargo objected to the amicus brief, and urged the court to dismiss the appeal because the pro se appellant had not filed a proper brief of his own. See Carlson v. Wells Fargo Bank, N.A. No 01-18-008-2-CV (First Court of Appeals in Houston) (objection to amicus brief pending)

The Discover Bank case is by far the most interesting one. In it, the creditor’s collection law firm moved to have the debtor’s appeal dismissed because he had not filed a brief that complies with the appropriately-labeled TRAPs (Texas Rules of Appellate Procedure).

The Bank then moved to have the TRAP-compliant amicus brief struck too, arguing that this brief would do no more than duplicate the (anticipated) arguments of the appellant. -- If only he had been able to write the anticipated appellate arguments himself, going the DIY route.

The ultimate irony here is that Discover Bank‘s appellate counsel invoked Judge Posner in the Bank’s effort to squish this pro se appellant. The same Judge Posner who recently made it his mission to advocate for pro se litigants.

See Posner Justice for Pro Se’s Center home page at http://www.justice-for-pro-ses.org/

This Discover Bank case is set for submission without oral argument on January 22, 2019 in Dallas.

If any one among the esteemed scholars associated with the CREDIT SLIPS site is interested in weighing in on the plight of the pro se litigants in trial and appellate courts, it can be done by amicus letter. Tex. R. App. P. 11 (the Amicus Curiae rule) spells out the minimal requirements for an amicus brief. Leave of court and party consent are not among them in Texas. And letters are routinely accepted in addition to full briefs.

The pending case is Gaddam v. Discover Bank, No. 05-17-01442 (Fifth Court of Appeal in Dallas) (motion to dismiss por se appeal pending, motion to reject amicus curiae brief pending)


I am a social scientist, not a lawyer, so I couldn’t perform the pro bono act as an attorney.

It’s a novel amicus approach under TRAP 11, which is normally used by industry groups to let the homogenously Republican Texas Supreme Court know how they want it to rule, and this novel approach is about to get squashed too.

Unless advocates and other people of good will step forward and do something.

Like Judge Posner.

To his credit, after a long and accomplished career.
Alas, it will not make him many friends, for pro se litigants are generally reviled by the legal profession.

Wolfgang P. Hirczy de Mino, Ph.D. (Political Science, Univ. of Houston, 1992)
View my research on my SSRN Author page:

Email: [email protected]

TRAP Rule 11. Amicus Curiae Briefs

An appellate clerk may receive, but not file, an amicus curiae brief. But the court for good cause may refuse to consider the brief and order that it be
returned. An amicus curiae brief must:
(a) comply with the briefing rules for parties;
(b) identify the person or entity on whose behalf the brief is tendered;
(c) disclose the source of any fee paid or to be paid for preparing the brief; and
(d) certify that copies have been served on all parties.

Notes and Comments
Comment to 1997 change: This is former Rule 20. The rule is rewritten and now requires disclosure of the identity of the person or entity on whose behalf the brief is filed, and the source of any fee paid.
Comment to 2002 change: The change expressly recognizes that a court may refuse to consider an amicus curiae brief for good cause.

Tex. R. App. P. 11 (Amicus Curiae Brief)

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