Invoking Bigfoot, the Eastern District of New York Highlights the Absurdity of New FDCPA Theories

Suggesting that the latest FDCPA plaintiff's theories in New York have morphed into something other than consumer protection, Judge Glasser of the Eastern District of New York ("EDNY") penned an extensive (and rather scathing) decision detailing the abuse by plaintiffs-consumers (or more precisely, their counsel) in filing lawsuits for non-existent harms.

The holding of Kraus v. Professional Bureau of Collections of Maryland, Inc., No 17-cv-3402 (E.D.N.Y. Nov. 27, 2017), is straightforward. A settlement letter sent by a debt-collector that expressly provides an amount due (here, a 40% discount) and the specific date by which the consumer could pay that amount in full satisfaction of the debt, is sufficient to satisfy the safe harbor provision of Avila—rendering a disclosure that a debt may increase unnecessary. Id. at p. 11. In other words, the Kraus decision adheres to the case law set forth by the Second Circuit, and follows the reasoning of a number of cases that have come before it. See Dick v. Enhanced Recovery Company, LLC, No. 15-cv-2631, 2016 U.S. Dist. LEXIS 135789 (E.D.N.Y. Sept. 28, 2016); see also Rozier v. Fin. Recovery Sys., 2011 U.S. Dist. LEXIS 61307, at *14 (E.D.N.Y. Jun. 7, 2011); but see Balke v. Alliance One Receivable Management, Inc., 2017 U.S. Dist. LEXIS 94021, at *1 (E.D.N.Y. Jun. 19, 2017).

Interestingly, Judge Glasser critiques the Second Circuit's decision in Avila, finding it illogical to read implications into a collection letter when the language in the letter fails to even address the topic purportedly implied. Judge Glasser asked: "Can a letter be fairly described as 'ambiguous' (or 'deceptive' or 'misleading') regarding interest if it says nothing about interest? The Court submits that the answer is no—that it makes as much sense to say the letter in Avila was ambiguous regarding interest as to say it was ambiguous regarding the date of the next presidential election or the existence of Bigfoot." Id. 

The Kraus decision further articulates many of the frustrations that debt-collectors face with the ever expanding claims brought under the FDCPA. As Judge Glasser shrewdly notes, the FDCPA, enacted to curb abusive and deceptive behavior, has now devolved into "a glorified game of 'gotcha,' with a cottage industry of plaintiffs' lawyers filing suits over fantasy harms the statute was never intended to prevent." Id. at p. 15. On the topic of harm—or lack thereof—Judge Glasser appears to acknowledge that today's FDCPA is wielded as a sword for consumers to avoid paying debts, and asks that other courts not indulge thinly veiled attempts by consumers to use the FDCPA as a "debt-relief statute."

Although a satisfying read for debt-collectors, Judge Glasser's decision does not alter the landscape just yet since he could only reach this decision because the facts in Kraus fit within the exception carved out by the Second Circuit in Avila. However, maybe Judge Glasser, hot on the heels of Judge Cogan's similar critique (in Islam) of the FDCPA theories of today, will slowly move the needle toward a more reasonable interpretation of the FDCPA.