Consumer Litigation

Hinshaw attorneys have extensive trial and appellate experience in consumer litigation cases. In fact, our lead attorney in this area, David M. Schultz, has earned a national reputation for defending clients in matters arising from the application of the Fair Debt Collections Practices Act. He has been lead counsel in well over 100 class action lawsuits involving claims brought under various state and federal consumer laws, including the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. He has also been counsel in multi-district litigation cases.

Collectively, our firm has handled no less than 1,000 consumer litigation cases in the last dozen or so years; among these, somewhere between 25 to 40 percent started as putative class actions. We are currently involved in several putative class actions under the FCRA.

Our attorneys have handled consumer litigation around the country. We are very familiar with the top plaintiffs’ attorneys in the industry ― the “high filers,” and have litigated against a number of them. Thus, we maintain a professional working relationship with these “high filers,” whereby we are able to discuss a matter and push for a reasonable  settlement. If it appears settlement is appropriate, our attorneys move quickly to negotiate a resolution that is acceptable to our client.

However, we also understand that we sometimes have to advocate for fighting cases. Thus, when there is an especially weak case, we believe in taking the case through summary judgment and, if necessary, to trial.

Likewise, if our clients are subjected to repetitive cases raising the same or similar legal issue, we encourage them to make a stand and fight if it is defensible. Hinshaw’s consumer litigation attorneys have been particularly successful with this strategy. In fact, we have been hired to handle cases specifically for the purpose of trying to make case law that is favorable to the industry; and, we have had good success in this respect.

For example:

• Olvera v. Blitt & Gaines, P.C., 431 F.3d 285 (7th Cir. 2005). In this case, the theory was that the debt buyer, debt collector and lawyer could not accrue interest on debts consistent with the original credit instruments. For those industries, that could have meant an impact on the portfolios of hundreds of millions of dollars. This was a theory that had to be fought. There were more than a dozen of these cases filed and we defended most of them and won.
• Sanders v. Jackson, 209 F.3d 998 (7th Cir. 2000). This is the seminal case on the class action exposure for the debt buying and collecting industry. The court agreed with our narrow interpretation of the statute. The plaintiffs’ bar had been filing cases and claiming net worth as fair market value. We convinced the court that book value based on audited financials should be used to determine net worth. The exposures in class actions were on average five to 10 times less than what the plaintiffs were claiming. The case is probably the most significant victory for the industry in reducing exposure.
• Greco v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360 (2nd Cir. 2005). We were chosen to defend this test case. We won at the trial and appeal levels, developing favorable law for attorney consumer lawyers.

Since most of these cases are either filed in Federal Court or removed to Federal Court, we find that a Rule 68 offer of judgment can be an effective tool in keeping down settlement costs. We also know that it is a tool that should be selectively utilized.

As national counsel to our clients, we monitor the strategies of the NACA members so our consumer litigators are prepared, with local counsel, to counteract their initiatives. Also as national counsel, we assure nationally coordinated positions in our clients’ cases, including with pleadings, motions, discovery responses, depositions and document production, among other things.

With respect to alternative dispute resolution mechanisms, given the structure of the Federal Court system where most of these cases are brought, the Magistrate Judge often acts as a mediator and is fairly successful in our experience. Thus, it is not common to go through the cost of arbitration or mediation. In addition, we have had success in enforcing arbitration rights, which eliminates the class, and often leads to settlement of the case before conducting the arbitration.