Faced with a FDCPA Claim Based on a Failed State Court Collection Act? MS&S Provides a Road Map for Success Based on Its Most Recent Win


In the U.S. District Court for the Eastern District of Missouri, collection law firms have faced a surge of litigation concerning failed state court collection actions.  Intent on finding a way to recover their attorneys’ fees from defending collection actions when they are unavailable under state law, consumer attorneys’ have turned to the fee-shifting provisions found in the FDCPA. According to the theory advanced by consumer attorneys, any time a collection plaintiff dismisses its suit prior to trial, or misses a procedural deadline, a FDCPA claim results, which entitled them to collect their defense fees from the action.

In Layton v. CACH, LLC, a consumer attorney filed just such a claim. Layton alleged that the asset purchaser filed a collection lawsuit against him without the intent or ability to prove that the debt was owed. Instead of filing a motion to dismiss, the asset purchaser filed an answer to the complaint, attaching the very documents that Layton claimed the asset purchaser could not obtain: the bill of sale and twenty-eight pages of credit card statements.  It then moved for judgment on the pleadings.

The court explained unlike with a motion to dismiss a motion for judgment on the pleadings allows the court to consider materials attached to the answer to the complaint that are “necessarily embraced by the pleadings.” Because the asset purchaser attached the very documentation that Layton alleged it could not produce, he could not state a plausible cause of action for relief.

Layton’s arguments concerning an affidavit used in the state court collection action were similarly flawed. While he argued that an affidavit from the asset purchaser in the collection action was misleading because it was intended to give the appearance to the consumer that the asset purchaser had “personal knowledge” regarding all aspects of the purchaser’s collection action, the court found otherwise. The court concluded that the language used by the asset purchaser in the affidavit was not misleading in any fashion.

While the court mentioned that cases based on improper conduct in a collection action must be evaluated on a case-by-case basis, the opinion in Layton provides a road map for consumer litigation defense attorneys to use in defeating such claims.

Nicole M. Strickler represented the defendant in the Layton case and has defended countless claims based on the same, or similar theories. Contact her at nstrickler@messerstrickler.com or (312) 334-3442 for more information.

View the Memorandum and Order Here.