No Reyes of Hope as Fifth Circuit Manipulates Numbers to Ignore It’s Own Precedent FDCPA Case Law

The plaintiff appeals from the district court’s grant of summary judgment to the defendant law firm and decertifying a class of plaintiffs under the Fair Debt Collection Practices Act. Her primary argument is that the defendant is a “debt collector” for the purposes of the Fair Debt Collection Practices Act.

We disagree and AFFIRM for Steeg Law, HOA Lawyers and Debt Enforcers.

JONES, EDITH H.

CLEMENT, EDITH B.

SOUTHWICK, LESLIE H.

THIS 2019 5TH CIRCUIT PANEL STARTS WITH A DISCLAIMER

As a panel of this court previously acknowledged, this circuit has not developed a bright-line rule to determine when a law firm is a debt collector for the purposes of the FDCPA. Hester v. Graham, Bright & Smith, P.C., 289 F. App’x 35, 41 (5th Cir. 2008). We decline to adopt such a standard today and instead continue to consider a variety of factors.

THE LIEN LETTERS FOR UNPAID CONDO ASSESSMENTS = TO START FORECLOSURE PROCEEDINGS

The parties agree that Steeg Law is not primarily engaged in debt collection activity. The firm stated that it provides “commercial litigation, transactional, and real estate services to . . . condominium association clients, who on occasion request[] assistance in recording privileges under La. R.S. § 9:1123.115.” Privileges under Louisiana law are a form of security. Before recording a privilege, Steeg Law’s practice is to transmit lien letters to unit owners. These letters relate to disputes concerning “unpaid condominium assessments, violations of the condominium owner declarations, or any other basis permitting the association to record a privilege.”

REYES ARGUMENT, WITH 5TH CIRCUIT PRECEDENT RULING (1997)

Reyes emphasizes that we have previously held that an attorney “who, during a single nine-month period, attempts to collect debts owed another by 639 different individuals ‘regularly’ attempts to collect debts owed another, and thus is a debt collector under [Section] 1692a(6),” although the debt collection work for that client constituted 0.5% of his practice during that nine-month period. Garrett v. Derbes, 110 F.3d 317, 318 (5th Cir. 1997).

OHHH, WE SEE, IT’S A NUMBERS GAME, LET’S JUST MANIPULATE THAT TO THE DEBT COLLECTOR, EHEM…LAW FIRM’S ADVANTAGE

While it is certainly true that the lien letters and the negotiations, research, and drafting work associated with each letter made up more than 0.5% of Steeg Law’s practice during the relevant period, this work did not represent a large part of the firm’s overall practice.

LIT OPINION: WHERE THE FDCPA IS CONCERNED, THIS CURRENT APPELLATE COURT IS PRO BANK, PRO DEBT COLLECTOR (LAWYERS), ESPECIALLY IN REAL ESTATE TRANSACTIONS.

In Derbes (1997 5th Circuit)

“Clearly, Congress must have intended the “principal purpose” prong of § 1692a(6) to differ from the “regularly” prong. See Jarecki v. Searle & Co., 367 U.S. 303, 307-08, 81 S. Ct. 1579, 1582, 6 L. Ed. 2d 859 (1961) (noting that we may not adopt a forced reading of a statute that renders one part a mere redundancy). Thus, a person may regularly render debt collection services, even if these services are not a principal purpose of his business.”

Panel consisted of:  Jones, Clement and Southwick

Fifth Circuit Opinion