CEB Prac. Guide § 2A.03 -- Statutory Background and Pre-emption -- Relationship between the State and Federal FDCPA and the Federal Bankruptcy Code

In Brown v. Transworld Sys., Inc., No. 22-35244, 2023 WL 4536970, at *4–5 (9th Cir. July 14, 2023), the Court of Appeals for the 9th Circuit affirmed its prior decision in Walls v. Wells Fargo. We held that Walls did not preclude his claim because “whether an unfair debt collection practice occurred does not depend on issuance or enforcement of… Read More

In Manikan v. Peters & Freedman, L.L.P., No. 19-55393, 2020 U.S. App. LEXIS 37176 (9th Cir. Nov. 25, 2020), the 9th Cir. distinguished its Walls decision to allow an FDCPA claim to proceed because the claim did not depend on the issuance or enforcement of the discharge order. P&F contends that Walls categorically bars a discharged debtor's FDCPA claims brought against… Read More

In Carter v. Richland Holdings, No. 2:16-cv-02967-RFB-VCF, 2019 U.S. Dist. LEXIS 168010, at *12-15 (D. Nev. Sep. 30, 2019), the District Court granted summary judgment against an FDCPA Plaintiff. AcctCorp argues that it was not reporting the debt in connection to an attempt to collect the debt pursuant to 15 U.S.C. § 1692e, but to comply with the Fair Credit… Read More

In Scally v. Ditech Financial, LLC, 2017 WL 371996, at *5–6 (S.D.Cal., 2017), Judge Hayes dismissed an FDCPA class action arising out of collection of discharged debt. In this case, the first amended complaint alleges that Defendant sent letters to the Plaintiff attempting to collect on a discharged debt which contain various statements “falsely implying that the debt remained viable.”… Read More

In Owen v. LNV Funding, LLC, 2016 WL 4207965, at *3 (7th Cir. 2016), the Court of Appeals for the Seventh Circuit found nothing inherently deceptive about filing stale proofs of claims in bankruptcy court. Thus, the Bankruptcy Code contemplates that creditors will file proofs of claim for unenforceable debts—including stale debts—and that the bankruptcy court will disallow those claims upon the… Read More

In Nelson v. Midland Credit Management, Inc., 2016 WL 3672073, at *2 (8th Cir. 2016), the Court of Appeals for the Eight Circuit disagreed with the 11th Circuit's Crawford decision on the actionability under the FDCPA of filing time-barred proofs of claim. Nelson urges this court to follow the Eleventh Circuit and extend to bankruptcy claims the rule against actual… Read More

In Garfield v. Ocwen Loan Servicing, LLC, 2016 WL 26631, at *2-3 (C.A.2 (N.Y.),2016), the Court of Appeals for the Second Circuit said that FDCPA claims grounded in post-discharge misconduct are independent of the bankruptcy code. Where, as in this case, the later statute is the Bankruptcy Code, a distinction must be made between claims brought under the earlier statute during the… Read More

In Covert v. LVNV Funding, LLC, --- F.3d ----, 2015 WL 877133 (4th Cir. 2015), the Court of Appeals for the Fourth Circuit held that a debtor could not bring FDCPA claims against his former creditor for filing improper proofs of claim in the bankruptcy court because the closure of the debtor’s Chapter 13 case terminated all of his rights.… Read More

In Slaughter v. LVNV Funding, LLC, 2015 WL 627954 (N.D.Ala. 2015), Judge Bowdre found that an FDCPA claim arising from the defendant’s filing Proofs of Claim on expired debt remained a “core” proceding under Crawford and the reference to the bankruptcy court should not be withdrawn Given the court's determination that the FDCPA claim is inextricably related to the bankruptcy… Read More

In Patrick v. Pyod, LLC,--- F.Supp.2d ----, 2014 WL 4100414 (S.D.Ind.. 2014), Judge Young held that filing a proof of claim in bankruptcy court on time-barred debt violates the FDCPA. The Eleventh Circuit recently decided a case nearly identical to the one before the court. See Crawfrod v. LVNV Funding, LLC, No. 13–12389, 2014 WL 3361226 (11th Cir. Jul. 10,… Read More

In Crawford v. Franklin Credit Management Corp., --- F.3d ----, 2014 WL 3377175 (2d Cir. 2014), the Court of Appeals for the Second Circuit held that that a Plaintiff who had filed Chapter 13 bankruptcy lost standing when she filed the Petition, but regained standing when she dismissed the Petition. We conclude that Crawford has standing to pursue her present claims because her… Read More

In Crawford v. LVNV Funding, LLC, --- F.3d ----, 2014 WL 3361226 (11th Cir. 2014), when the 11th Circuit sets it put this way, you pretty much know how its coming down. A deluge has swept through U.S. bankruptcy courts of late. Consumer debt buyers—armed with hundreds of delinquent accounts purchased from creditors—are filing proofs of claim on debts deemed unenforceable under… Read More

In Gusman v. Modern Adjustment Bureau, 2011 WL 2580358 (C.D.Cal. 2011), Judge Collins applied Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 510 (9th Cir.2002) to bar a plaintiff’s FDCPA claim.  In Walls, the Ninth Circuit held that claims under the FDCPA are precluded when they are premised on an alleged violations of the Bankruptcy Code, in particular the… Read More

In McCarther-Morgan v. Asset Acceptance, LLC, 2010 WL 1417868 (9th Cir. 2010), the Court of Appeals for the Ninth Circuit affirmed Bankruptcy supremacy over the FDCPA and Rosenthal Act, explaining:    Betty Jean McCarther-Morgan appeals the dismissal of her adversary action against Asset Acceptance, LLC. McCarther-Morgan alleges violation of the Fair Debt Collection Practices Act (“FDCPA”) and the California Rosenthal… Read More

In Allers-Petrus v. Columbia Recovery Group,C08-4433FDB (D.Or. 2009), Judge Burgess held that a debtor's failure to disclose a pending FDCPA claim in her Ch. 13 Bankruptcy schedules judicially estopped her from bringing those claims later in the district court.  Nor could the debtor re-open her bankruptcy to cure the issue.  Judge Burgess explained: Plaintiff Allers-Petrus filed her bankruptcy petition with… Read More

In Murphy v. Triad Financial, Judge Benitez of USDC for the Southern District dismissed a Rosenthal Act claim as lacking federal question jurisdiction.  Judge Benitez rejected the argument that since Civil Code § 1788.17 incorporates the federal FDCPA, claims filed under that section trigger federal question jurisdiction under the "substantial federal question" doctrine.  The parties "argue that Murphy's Rosenthal Act… Read More