The front page of the New York Law Journal (Nov. 4, 2011) housed this torturous story about an Erie County woman who took it upon herself to hold accountable a debt buyer, Palisades Collection, LLC, and its retained collection law firm, Pressler & Pressler, LLP, for dragging her into court four times utilizing unfair, harassing, and unfair litigation tactics.
Palisades' first action, where Forster & Garbus, LLP, acted as original counsel, was dismissed because the consumer's residence was outside the court's jurisdiction. Palisades' second lawsuit, also brought Forster & Garbus, LLP, was similarly dismissed for jurisdictional problems. Palisades' third action, now using defendant Pressler & Pressler, LLP, was dismissed for Pressler's failure to show up at a court proceeding. Finally, the Palisades-Pressler combination sued the consumer a fourth time, which was dismissed when Palisades and Pressler failed to oppose the consumer's motion to dismiss the action for another jurisdictional defect.
In this federal case, Curto v. Palisades, Collection, LLC, Palisades Collection, LLC and Pressler & Pressler, LLP were denied their request to defeat the claims brought against them. These defendants argued that they were legally entitled to bring those four cases. Not so fast, ruled Judge William Skretny, District Judge for the Western District of NY. The first and third collection lawsuits "ran afoul" of Fair Debt Collection Practices Act ("FDCPA") § 1692i, a consumer protection statute that prohibits suing consumers in courts outside of their "jurisdiction." (same city or contiguous town). This law protects consumers from being dragged into distant courthouses, a prejudical practice that leads to higher default judgement rates.
Palisades and Pressler made an argument that simply ignores the FDCPA: that procedurally, they were entitled to re-file their lawsuits that were previously dismissed for jurisdictional defects. That argument fails to address their misdeed of originally filing the lawsuits in the WRONG COURTHOUSES.
Palisades and Pressler also argued that their actions were the result of "bona fide error." (a codified defense that permits collectors to escape liability if they factually demonstrate that the "errors" occurred unintentially notwithstanding the "maintenance of procedures reasonably adapted to avoid such errors." Palisades and Pressler failed to produce adequate evidence of these procedures, especially since this case involves four defective lawsuits, and the location problems could have been cured by a simply "keeping track of where venue had already been found improper."
I'm actually surprised these defendants raised this defense after such a blatant demonstration of unfair litigation tactics. Rather than acknowledge responsibility and pay an aggrieved consumer the meager statutory damages warranted for blatant collection violations, some debt collectors and collection lawyers prefer to make the statement that they will fight these cases vigorously to deter future FDCPA lawsuits. That assumption is flawed because it fails to consider that the FDCPA is a "fee-shifting" statute, which means that the violating collector pays the aggrieved consumer's legal fees, if a violation, however technical, is established.
The court here also found that the mere filing of four successive lawsuits without fully prosecuting any one of them could amount to harassing or abusive tactics.
Palisades and Pressler further failed to explain why they started a lawsuit within the 30-day "verification" period (time period in which consumer may demand proof), an act that "overshadowed" the consumer's "out-of-court rights" to ascertain basic information as to the validity of the debt.
My respect goes to Ms. Patrica Curto who stood up against these collectors and quite adeptly recognized and enforced her consumer protection rights under the Fair Debt Collection Practices Act.