Declaratory Judgment

[Coltfan1972]

I'm filing a federal suit very soon. My main allegation is the agency that contacted me was not licensed in my state. So, I've asked the court for declaratory judgement/ruling, finding this agency in violation of the Arkansas Collection Agency Act, which clearly they are in violation of. I've actually confirmed with the head of the agency they are in clear violation.

In my research it appears a declaratory ruling is mainly used when there is some dispute or question. The court will make the ruling as somewhat of a pre-trial ruling. It is binding, unlike an FTC or Attorney General opinion.

My question is, I know I don't really need this ruling. However, I'd like to make life hard on this agency and on top of that set them up if anybody else researches they can see there was a ruling they were in violation of a state collection law.

I'm fine with the time, leg work, extra arguments, ect... In fact, that is actually a bonus in my book. Can anybody give any opinions on anything negative that I could face asking for this ruling from the court?

I've prayed for the declaratory judgment in the relief sought and have clearly made a prima facie case (actually way more than prima facie) in the complaint the agency is in violation of state law.

On a side note, the state law does not have a private right of action, so I'm asking for no monetary relief for the violations under the state law violation. My monetary relief is being asked for due to the state law violation triggering the FDCPA violation.

I'm using this case to support my position;

A violation of a state law will consitute a violation of the FDCPA if the state law violation is a violation which involves false, deceptive, or misleading representations. See, Carlon v First Revenue Assurance, 359 F3d. 1015 (2004). This is from my federal circuit so slam dunk.

You can't get anymore deceptive or misleading representations, than acting as a collection agency in a state you are not licensed to collect. That just screams misleading representations.

[BV80]

The only argument the CA may have could come from the case law you cited.

"In contrast to the collection agency's actions in Picht, even if FRA was violating Minnesota law by not having the Seattle lockbox licensed (and we have concluded that it was not), that violation would not constitute a false or misleading representation."

[Coltfan1972]

Exactly, the court found that violation was not a state law violation that would trigger an FDCPA violation, even if they would have found it to be a state law violation, which they did not. Also they talk about the Minn. state collection law basically being open to wide interpretation.

Then they defined what type of state law violations would trigger an FDCPA violation. Those being; false, deceptive, and misleading representations. Also, unlike Minn law, AR collection law states;

"It is unlawful for any person, partnership, association or corporation to conduct within the state of Arkansas a collection agency or engage within this state in the business of collecting claims for others or of soliciting the right to collect or receive payment for any other person of any claim, or advertise, either in print, by letter, in person, or otherwise, the right to collect or receive payment for another of any claim, or seek to make collection or obtain payment of any claim on behalf of another person without having first applied for and obtained a license from the State Board of Collection Agencies.

So AR law really lays it out. Anything can happen, but unlike the alleged MINN state law violation, I can't see anyway, at almost 100% certainty, the judge would not rule this agency which contacted me with no license in the state of AR is in violation of AR state law.

I can see where the cited law might give the collector what they think might be a crack to find some defense, but I think I can clearly show the differences in the MINN case they ruled was not a violation and my allegations.

Also in the MINN case the court ruled the Defendant was not even collecting, but banking. No way these clowns in my state will be able to argue they were "banking"

Edited March 25, 2012 by Coltfan1972

[usagi555]

I've prayed for the declaratory judgment in the relief sought and have clearly made a prima facie case (actually way more than prima facie) in the complaint the agency is in violation of state law.

On a side note, the state law does not have a private right of action, so I'm asking for no monetary relief for the violations under the state law violation. My monetary relief is being asked for due to the state law violation triggering the FDCPA violation.

Sounds familiar Does Arkansas have any statutes dealing with declaratory judgments?

[Guest usctrojanalum]

go for it, i say.

[1stStep]

The difference in your case I read is that you've got a written statement from the state regulator...if you call that person to testify (if it goes that far), then I'd say they are dead in the water....

My money is on this - expect a settlement offer to go away...

[usagi555]

The difference in your case I read is that you've got a written statement from the state regulator...if you call that person to testify (if it goes that far), then I'd say they are dead in the water....

My money is on this - expect a settlement offer to go away...

And I'm betting that annoyingly enough, it'll be good enough that it'll be hard to turn down. Those federal judges discourage treading on when the other side offers you what you're asking for as a settlement.

[legaleagle]

9.3 Declaratory Judgment Act | Federal Practice Manual for Legal Aid Attorneys

http://www.bfvlaw.com/UploadedFiles/Publications/nealw.PDF

I hate to be the one to p*** in your Wheaties, but you just knew I'd read this crap, didn't you. I feel like Kit in A League of Their Own.......high fastballs. Can't lay off them, can't hit them. Anyway, I could be out in left field myself, but as I read this, it seems to be a preventative measure used to avoid future controversy. The term injunction is mentioned quite often. Injunctive relief prevents someone from taking action against you that would cause harm. Usually it has to be imminent. I tried one of these myself. You need to research more and make sure this applies. Nascar would know, but he's MIA lately.

[usagi555]

9.3 Declaratory Judgment Act | Federal Practice Manual for Legal Aid Attorneys

http://www.bfvlaw.com/UploadedFiles/Publications/nealw.PDF

I hate to be the one to p*** in your Wheaties, but you just knew I'd read this crap, didn't you. I feel like Kit in A League of Their Own.......high fastballs. Can't lay off them, can't hit them. Anyway, I could be out in left field myself, but as I read this, it seems to be a preventative measure used to avoid future controversy. The term injunction is mentioned quite often. Injunctive relief prevents someone from taking action against you that would cause harm. Usually it has to be imminent. I tried one of these myself. You need to research more and make sure this applies. Nascar would know, but he's MIA lately.

Towards the end, it does have this:

Generally, the potential reach of an injunctive remedy implicates the jurisdictional power of the court to bind parties and enforce judgments./151/ Arguably, absent a certified class, an injunctive order may not run affirmatively in favor of persons (or class of persons), other than the named plaintiffs./152/ However, a number of courts upheld the issuance, under the Declaratory Judgment Act, of broad injunctive relief directed against a defendant government agency or official to remedy an ongoing violation of federal law even in the absence of a certified class./153/ Under the reasoning of these decisions, an injunction issued to correct a defendant’s policy or practice which is unlawful, not only as to the named plaintiff but also as to others, is not overbroad, notwithstanding the absence of a certified plaintiff class./154/

Coltfan is not going to be a class representative here, therefore, he is asking the court to clarify that they must be licensed. Once that is done, the hope is that there would be a deterrent by the defendant to engage in collection practices without a license in the future without having to ask for statewide injunctive relief. He may not have to ask for such, but if he does get the ruling and the agency continues to engage in its illegal behavior, he has laid the groundwork for his AG's office to request as much. Once the court has said they must be licensed, they have no excuse whatsoever, which will make them look extraordinarily bad should they continue their current behavior.

[legaleagle]

I agree, but I don't see where a federal court needs to declare that they need to be licensed. The state of AR already did that, it is a matter of law. This statute is rather vague, I would suggest he check this out. It may not even be necessary. What he is going for sounds more like a directed verdict. broad injunctive relief directed against a defendant government agency or official This is the tough part, it sounds like they use this to stop discrimination in the workplace, etc. This is above my pay grade, but interesting. Too bad Nascar isn't around. Maybe we should PM him. He practices in federal court.

[usagi555]

I agree, but I don't see where a federal court needs to declare that they need to be licensed. The state of AR already did that, it is a matter of law. This statute is rather vague, I would suggest he check this out. It may not even be necessary. What he is going for sounds more like a directed verdict. broad injunctive relief directed against a defendant government agency or official This is the tough part, it sounds like they use this to stop discrimination in the workplace, etc. This is above my pay grade, but interesting. Too bad Nascar isn't around. Maybe we should PM him. He practices in federal court.

Perhaps he could ask for broad injunctive relief instead, but doing it this way allows for a similar effect "without the strong medicine" of injunctive relief.

I also have a personal interest in this topic, but my situation is also a bit different. The state will not declare that the party of interest needs to be licensed because there is no guidance for them to do so.

[1stStep]

\The state will not declare that the party of interest needs to be licensed because there is no guidance for them to do so.

This is why I think Coltfan has a good case - he's got something from his state that any CA has to licensed in his state in order to collect...

I know that if this case were to go trial, the other side would rely on the precedent from MN...something that Coltfan should easily overcome. At the very least, it is an interesting federal question.

[usagi555]

This is why I think Coltfan has a good case - he's got something from his state that any CA has to licensed in his state in order to collect...

I know that if this case were to go trial, the other side would rely on the precedent from MN...something that Coltfan should easily overcome. At the very least, it is an interesting federal question.

I agree his case is excellent. I'm pretty sure I'm right regarding laws in my state. There's no guidance for the state to say that they shouldn't be licensed either, and the people that I've talked to really know far less about the specific law and its history than I do at this point. I'll have to duke it out. Coltfan, on the other hand, can probably make them fold just by filing the complaint. (Sorry Coltfan, I know you want the fight, but don't be surprised if they immediately figure it's cheaper to give you exactly what you're asking for.) He probably could also ask for broad injunctive relief.

[kittymamma]

Go get um tiger, you can do it::allhail::

[Coltfan1972]

Thanks everybody for the great input, even you Legal. I need and want to know everything, the good and bad. Great comments, suggestions, and analysis. I love this board and the knowledgeable members we have !!

I think I'm on solid ground asking for the relief. I'm not asking the federal court to rule they must be licensed. The state of Arkansas has already stated this. I'm asking the federal court to rule they are in fact in violation of the Arkansas Collection Agency Act (ACAA).

The reason I am asking the court for this ruling is somewhat for what has been discussed. I do want others to be able to research this and see that a court found, not they had to be licensed, but they were in violation of the licensing requirement under the ACAA. The ACAA has no private right of action. Therefore, I feel asking for a ruling they are in violation is important. It does not hurt they obviously in violation.

Also, while I considered going class action, I'm on my own and not a member of any class. This is an individual lawsuit only. So I do see what you were referencing Legal, but I do think my case is a little different.

I'm not asking the court for any relief with this ruling. I'm using it to "lay the foundation" for the FDCPA claim. If I get the Dec. judgement, summary judgement is just a forgone guarantee. I'm not asking for an injunction, although that might not be a bad idea. Also since all states have different requirements, I think the request is ripe. Their licensing violation would not be across the board a violation of every state law, so it's a federal question that needs an answer, even though I think the answer is 100% obvious.

I also have the director of the state board of collection agencies that will testify if needed. She was subpoenaed on my last case and to say she is on the side of the pro-se consumer going against the unlicensed agency is an understatement.

She actually offered to bring the whole roster of agencies licensed so I could enter those in evidence and then be able to ask her if the agency I sued was licensed. In other words she helped me by turning the subpoena into a subpoena duces tecum, when she saw my lack of asking her to bring the proper evidence.

Also as discussed by 1stStep, I should have little problems destroying their reliance on the MINN case. In that case the court did not even rule the agency violated state law and I read the whole opinion and they even talk about the lack of specific requirements in the MINN law.

I've also got this gem, and it's recent. Brandshaw v. Hilco Receivables, LLC, No. RDB-10-113, 2011 U.S. Dist. LEXIS 17954 (D. Md Feb, 23, 2011). The court flat out ruled that not being licensed by a state that required a license was in fact a violation of the FDCPA. This was even a class action suit. It's a different circuit, but dead on and the ruling is a tad over a year old.

I don't need this ruling (in my opinion), I just want it. My case is solid without it and I've got other violations, but this is the ace in the hole. I want a federal court to slap these clowns around and have being done by somebody that is not an atty and never stepped foot in a federal courtroom.

On an unfortunate side note, I'm expecting an offer of judgement to quickly be presented, in effect, forcing me to make a tough decision. However, in the last case, in a million years I never thought they would fight as hard as they did to the very end. They got destroyed every step of the way and just keep on throwing good money after bad.

I hope these clowns make the same mistake and assume I have a ghost attorney writing all my pleadings, and that I will fold like a cheap suit if I actually have to argue my case when I'm in court alone.

If so, I'm ready !! Bring it on !!

And they bet get ready for the ultimate "uh oh" moment when the arguments start. I'll be damned if it turns out anything other than a complete debacle and train wreck for them.

Again, thanks to everybody for the detailed comments and research. While I'm in this one case for myself, I do want to try and get as much on the public record about these clowns, so anybody else facing them might stumble across a way to not only beat them, but make them pay you.

These clowns are so going to regret dismissing me as somebody that is bluffing and just looking for a quick "extortion check" as the inside arm gang likes to call them.

Edited March 25, 2012 by Coltfan1972

[legaleagle]

New Mexico Fair Debt Collection Practices Act

Found this for NM

New Mexico Fair Debt Collection Practices Act 61-18A-5. Unlawful to conduct collection agency or engage in the business of a repossessor without license.

A. No person shall conduct within this state a collection agency, act as a collection agency manager or engage within the state in the business of collecting claims for others or of soliciting the right to collect or receive payment from another of any claim or advertise or solicit either in print, by letter, in person or otherwise, the right to collect or receive payment for another of any claim or seek to make collection or obtain payment of any claim on behalf of another without having first applied for and obtained the licenses required by the Collection Agency Regulatory Act [ 61-18A-1 NMSA 1978].

B. No person shall conduct within this state the business of a repossessor without having first applied for and obtained a repossessor's license.

C. No person shall be considered to be engaged in collection activity within this state if that person's activities regarding this state are limited to collecting debts not incurred in New Mexico from debtors located in this state by means of interstate communications, including telephone, mail or facsimile transmission, from the person's location in another state.

[usagi555]

New Mexico Fair Debt Collection Practices Act

Found this for NM

New Mexico Fair Debt Collection Practices Act 61-18A-5. Unlawful to conduct collection agency or engage in the business of a repossessor without license.

A. No person shall conduct within this state a collection agency, act as a collection agency manager or engage within the state in the business of collecting claims for others or of soliciting the right to collect or receive payment from another of any claim or advertise or solicit either in print, by letter, in person or otherwise, the right to collect or receive payment for another of any claim or seek to make collection or obtain payment of any claim on behalf of another without having first applied for and obtained the licenses required by the Collection Agency Regulatory Act [ 61-18A-1 NMSA 1978].

B. No person shall conduct within this state the business of a repossessor without having first applied for and obtained a repossessor's license.

C. No person shall be considered to be engaged in collection activity within this state if that person's activities regarding this state are limited to collecting debts not incurred in New Mexico from debtors located in this state by means of interstate communications, including telephone, mail or facsimile transmission, from the person's location in another state.

There's an exemption for that that they are going to argue adamantly and I'm going to argue that it does not apply when they are engaging in normal debt collection activities where no attorney had given any review. I can find no published opinions that are binding on NM courts regarding this issue and thus far, no one in the state agencies have really known the answer. The exception is for "any attorney-at-law collecting a debt as an attorney in the name of and on behalf of a client;"

As it turns out, that particular exemption (and all of the other exemptions) are verbatim the same as the exemptions as to who is a debt collector as defined by the pre-1986 version of the FDCPA, and there is case law on all of that. I have yet to find a pre-1986 decision that disagrees with me, and I have looked. There is also a fairly recent federal decision regarding a NY City regulation that is also verbatim the same that agrees 100% with my viewpoint. I'm also trying to get my hands on the legislative history of the statute in the hopes that I can find some clear statements of intent. Barring that, I'll have to argue that having sections of the law match word-for-word to the FDCPA shows that the intent is similar to that of the FDCPA.

FYI, if you go to the next section in that act, it spells out the criminal penalties for not being licensed in the state. It's a fourth degree felony.

[legaleagle]

or engage within the state in the business of collecting claims for others

yes, this mirrors the FDCPA. I think they'd have a hard time with this, the NM law mirrors the fed.

[usagi555]

or engage within the state in the business of collecting claims for others

yes, this mirrors the FDCPA. I think they'd have a hard time with this, the NM law mirrors the fed.

I think they're going to have a tough time with it too, but given the potential consequences for them losing, I'm expecting a massive fight based on "We're lawyers, we don't need to be licensed." The potential aftermath beyond what I'm doing here includes disbarment, being totally shut down in the state and prison time. But you know what? While they may not physically hurt people, engage in breaking and entering, rape women and children or kick puppies in their heads, they have hurt tens of thousands of people here without even having the common decency to review the cases before filing them.

[Coltfan1972]

And I'm betting that annoyingly enough, it'll be good enough that it'll be hard to turn down. Those federal judges discourage treading on when the other side offers you what you're asking for as a settlement.

Yes, and I'm sure you know, the problem is when they actually make that an offer of judgement. It can really force your hand if their offer is close to the max you think you might get.

Nothing would be worse than winning at trial, but not winning by enough and still having to pay a portion of the other sides fees.

It's almost like sports betting when you bet for your team to win by a touchdown. If they win by a field goal, everybody is happy and can't figure out why you still look defeated. I mean your team won, right? Yeah, but not win by enough. That is how I look at an offer of judgement, not can I win, but can I win by enough.

[usagi555]

Yes, and I'm sure you know, the problem is when they actually make that an offer of judgement. It can really force your hand if their offer is close to the max you think you might get.

Nothing would be worse than winning at trial, but not winning by enough and still having to pay a portion of the other sides fees.

It's almost like sports betting when you bet for your team to win by a touchdown. If they win by a field goal, everybody is happy and can't figure out why you still look defeated. I mean your team won, right? Yeah, but not win by enough. That is how I look at an offer of judgement, not can I win, but can I win by enough.

Your trump card for this particular issue here is that you are pro se. They may think they're going to win, not because of the facts of the case, but rather because they think they can out-procedure you.

[Coltfan1972]

They may think they're going to win, not because of the facts of the case, but rather because they think they can out-procedure you.

I'll let you know how that works out for them.

[CalParalegal]

I'm not asking the federal court to rule they must be licensed. The state of Arkansas has already stated this. I'm asking the federal court to rule they are in fact in violation of the Arkansas Collection Agency Act (ACAA).

The question you are asking is one of subject matter jurisdiction that is properly vested in the state court which the ACAA falls under. If it was a FDCPA violation it would raise a federal question of law. Federal judicial power is derived from Art. III of the Const. in that it authorizes federal courts to hear claims that arise under Federal law. One exception is in a diversity jurisdiction cases that doesn't arise out of federal law (28 U.S.C. § 1332).

I'm curious as to your reasoning on why a federal court should rule on it? It sounds more like a collection licensing issue that falls under the State Board of Collection Agencies.

[usagi555]

The question you are asking is one of subject matter jurisdiction that be properly vested in the state court which the ACAA falls under. If it was a FDCPA violation it would raise a federal question of law. Federal judicial power is derived from Art. III of the Const. in that it authorizes federal courts to hear claims that arise under Federal law. One exception is in a diversity jurisdiction cases that doesn't arise out of federal law (28 U.S.C. § 1332).

I'm curious as to your reasoning on why a federal court should rule on it? It sounds more like a collection licensing issue that falls under the State Board of Collection Agencies.

The Federal court will rule on state claims if it is either a diversity action, or there are federal claims arising from the same nucleus of facts as the state claims. He's arguing that they violated the FDCPA, and those claims are related to the state law claims. In fact, he's arguing that their failure to be licensed in violation of the ACAA triggers a federal violation of the FDCPA. Federal and state claims are intertwined here.

[Coltfan1972]

The question you are asking is one of subject matter jurisdiction that is properly vested in the state court which the ACAA falls under. If it was a FDCPA violation it would raise a federal question of law. Federal judicial power is derived from Art. III of the Const. in that it authorizes federal courts to hear claims that arise under Federal law. One exception is in a diversity jurisdiction cases that doesn't arise out of federal law (28 U.S.C. § 1332).

I'm curious as to your reasoning on why a federal court should rule on it? It sounds more like a collection licensing issue that falls under the State Board of Collection Agencies.

USAGI555 beat me to it, but this is the statute that gives the federal court jurisdiction over my state claim. 28 U.S.C . § 1331 and 28 U.S.C. § 1367.

"In any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution."

My claims are defiantely related.