Don't Lie In Court, Don't Lie To Consumers' Lawyers: Wolpoff & Abramson Gets Another Pie In The Face

SAYYED v. WOLPOFF & ABRAMSON, USCA-4 No. 06-1458, http://pacer.ca4.uscourts.gov/dailyopinions/opinion.pdf/061458.P.pdf , on appeal from USDC-DMD, before Chief USCJ Wilkins, USCJs Wilkinson, Motz, opinion by Wilkinson, filed 09 May 2007.

LONG STORY SHORT: Debt collectors' false statements in court papers and false statements to consumers' counsel are violations of FDCPA, which overrides any common-law litigation immunity. Binding in MD, NC, SC, VA, WV.

FACTS: Wolpoff & Abramson, a collection law firm [Note: NOT! They are a lawyer-owned collection agency, not a law firm as respectable folk understand the term, because most of their collectors are rude, insolent, unprofessional NONlawyers who call up and demand payment, typically violating FDCPA any way they can for a buck. This case is a relatively rare one in which Wolpoff & Abramson actually sued somebody--but as will be seen, perhaps they should not have.], sued Plaintiff in Maryland state court for an alleged Discover Bank credit card on which Plaintiff allegedly defaulted.

Wolpoff & Abramson served interrogatories on Plaintiff that failed to disclose that they were communications from a debt collector. The interrogatories also falsely stated the court date, did not inform Plaintiff that any denials had to be under oath in order to be effective, and did not disclose that the state court could default Plaintiff if he did not serve answers within 30 days. Wolpoff & Abramson moved for summary judgment against Plaintiff, who claimed that the written motion misstated the amount of the debt, and also tried to collect 15% attorney fees that Wolpoff & Abramson was not entitled to.

PROCEDURE: Plaintiff filed a counterclaim in that case [Note: it's not clear from the opinion what he was claiming], whereupon Discover Bank fired Wolpoff & Abramson from the case, obtained new counsel, and settled with Plaintiff. Plaintiff also sued Wolpoff & Abramson in U.S. District Court for the District of Maryland for violating the following provisions of the Fair Debt Collection Practices Act: 15 U.S.C. § 1692e(2)(A) forbidding false statement of the amount of the debt in Wolpoff & Abramson's summary judgment motion; §§ 1692e(2)(B) and 1692f(1) forbidding collection of unauthorized attorney fees; § 1692e(10) forbidding misrepresentations, including the false trial date, the nondisclosure that interrogatory answers had to be under oath, and the failure to warn that Plaintiff could be defaulted for not serving answers within 30 days; and § 1692e(11) requiring that the interrogatories disclose that they were communications from a debt collector.

Wolpoff & Abramson moved to dismiss for failure to state a claim per Rule 12(b)(6), arguing that attorneys enjoy absolute immunity to suit for statements made in the course of litigation; Wolpoff & Abramson served the interrogatories not on Plaintiff directly, but on Plaintiff's counsel, whom FDCPA did not protect; and that any false statements in the summary judgment motion stemmed from reasonable reliance on their clients' representations. Taking all of Plaintiff's statements as true for purposes of the motion, the trial court mentioned "witness immunity" and ruled that absolute common law immunity protected Wolpoff & Abramson from any claims based on statements made in litigation, and that a 15% attorney fee was reasonable, then went on to state that commercial litigation could not proceed if FDCPA were applicable to cases like these. MOTION TO DISMISS GRANTED; case closed. Plaintiff appealed to the U.S. Court of Appeals for the Fourth Circuit.

DECISION: Wolpoff & Abramson is definitely a "debt collector" under FDCPA and must obey it, even in the course of litigation. Wolpoff & Abramson was essentially arguing for absolute immunity in disregard of FDCPA's plain language. This the Fourth Circuit could not do. Congress wrote no blanket FDCPA exception for debt collection attorneys' litigation activities and the Supreme Court has refused to read any such exception into it. Congress did amend FDCPA to exempt formal pleadings § 1692(11), but not from the rest of FDCPA.

Neither is there any exception for communications to a consumer's counsel, because "communications" are "the conveying of information regarding a debt directly or indirectly to any person through any medium." Again, the Supreme Court has read no exception into "indirectly" that would immunize communications to counsel. Wolpoff & Abramson further argued [Note: it's not clear from the opinion whether the trial court ruled on this] that 42 U.S.C. § 1983, the civil rights statute under which people can sue government officials for violating the U.S. Constitution or federal laws, preserves common-law immunities for such officials, and therefore FDCPA does the same for debt collectors. The Fourth Circuit found flaws in that analogy, partly that Wolpoff & Abramson identified no immunity that would have protected them in this case, but mostly because § 1983 is a bare-bones paragraph from the Reconstruction era, while FDCPA is a comprehensive regulatory scheme meant to overwrite, not incorporate, the common law.

The trial court's concern that commercial litigation could not proceed if FDCPA applied to court proceedings was misplaced. This was a consumer collection case, not a commercial one. Neither did the case have anything to do with witness immunity. Plaintiff sued over false statements in Wolpoff & Abramson's summary judgment motion, not in the affidavits attached to it, and if Plaintiff could prove that violation, he could recover under FDCPA. Wolpoff & Abramson could still avoid liability by proving the statements true, or by proving the good faith error defense per § 1692k(c), but that was not a matter suitable for resolution on motion to dismiss. Lastly, neither side had fully briefed or argued two of Plaintiff's claims--unauthorized attorney fees and nondisclosure that the interrogatories were from a debt collector--so the Fourth Circuit expressed no opinion on them. The trial court needed to consider them in the light of this opinion. DISMISSAL REVERSED; cause remanded for further proceedings.

EDITORIAL: The hooligans of Wolpoff & Abramson take a well-deserved pimp-slap from Richmond! Tell the truth--what's so hard about that? Write "This is from a debt collector. This is an attempt to collect a debt." in the footer of every page--what's so hard about that? Put down the right court date--what's so hard about that? Now Wolpoff & Abramson is on notice that courts will not tolerate their shenanigans on grounds that, well, it was in court so we can do anything we want. Great decision, Fourth Circuit! Ernest P. Francis of Arlington, who won this appeal, is hereby awarded the FDCPA Blog Legion of Merit. Good show, Ernest. Wolpoff & Abramson's only comfort is, oh, the 8 kazillion dollars a day they make from unsuspecting consumers who don't know they're being illegally stomped on.

Wolpoff & Abramson: Don't lie to ME again. You are warned.