District Court grants summary judgment for defendant in FDCPA vicarious liability case

Courts FDCPA Debt Collection Vicarious Liability

On July 30, the U.S. District Court for the Northern District of Alabama granted a motion for summary judgment in favor of a debt collector (defendant) with respect to a plaintiff’s FDCPA allegations. The plaintiff alleged that the defendant, among other things, violated the FDCPA by engaging in abusive, deceptive, and unfair debt collection practices when the defendant allegedly filed a false proof of service in a collection action, which allowed the defendant to obtain a default judgment and garnish the plaintiff’s wages. The defendant, through a law firm, allegedly purchased a debt that the plaintiff had maintained. Subsequently, a collection lawsuit against the plaintiff was filed and a process server delivered the summons and complaint to the plaintiff. The plaintiff filed suit against the defendant, alleging the defendant violated the FDCPA by falsely claiming that it served the summons and complaint. After finding that the defendant itself did not falsify the service return form or have knowledge that a falsified service return form was filed, the court examined if the defendant is vicariously liable for the alleged violations undertaken by the collection law firm or the process server. According to the opinion, “a plaintiff may press an FDCPA claim pursuant to a theory of vicarious liability only if the pertinent parties both constitute “debt collectors” and they enjoy an agency relationship,” however, “the evidence fails to permit a reasonable determination that either may expose [the defendant] to vicarious liability.”

As previously covered by InfoBytes, in June, the U.S. District Court for the District of Oregon partially granted a plaintiff’s motion for summary judgment, finding that a debt buyer who puts accounts with a debt collector can be held vicariously liable for the actions of the debt collector, since the debt buyer “bear[s] the responsibility of monitoring the activities of those it hires to collect debts on its behalf.” However, in the U.S. District Court for the Northern District of Alabama case, the court found that that any alleged issues regarding summons and complaints in an underlying collection case do not qualify as the responsibility of the defendant.