DEBATE: A Couple of Interesting Rulings

[BV80]

ARBITRATION

Schultz v. Verizon Wireless, 8th Circuit Court of Appeals, 2016

https://scholar.google.com/scholar_case?case=4041828204713421601&q="Schultz+v.+Verizon"&hl=en&scisbd=2&as_sdt=4,113,128
 
The consumers/plaintiffs sued Verizon for alleged violation of the Telephone Consumer Protection Act.  Defendant Verizon motioned to compel arbitration and the plaintiffs consented.

Before the lower court ruled on the motion to compel, the parties engaged in settlement negotiations.  Verizon offered a settlement figure but the plaintiffs refused to sign the settlement agreement because it contained a non-disparagement clause.  In other words, in exchange for the settlement amount, the plaintiffs could not trash Verizon and take any other adverse actions that would negatively affect the corporation.  It's standard in most settlement agreements.

Well, it appears the plaintiffs wanted to have their cake and eat it too.  They wanted both the settlement money and the ability to trash Verizon.

Needless to say, Verizon withdrew the offer and the court granted the motion to compel arbitration.  The plaintiffs then appealed stating that the settlement agreement should stand.  The lower court disagreed and ruled that there was no enforceable agreement due to the fact that the plaintiffs refused to agree to an essential part of the agreement.  The 8th Circuit agreed with the lower court.

One of the plaintiffs then attempted to argue that he was not a party to the agreement and could not be required to arbitrate.  Again, the lower court disagreed and the 8th Circuit affirmed.

Long story short:   When the money is about to be handed to you, don't get stupid.

Any debate on the issues?

 

FDCPA

Davidson v. Capital One Bank (USA) - 11th Circuit Court of Appeals, 2015

https://scholar.google.com/scholar_case?case=16309688109984798702&q="Fair+Debt+Collection+Practices+Act"&hl=en&as_sdt=3ff87fe0000000000000000000000000004

1692a(6)(F) states that the term "debt collector" does not apply to

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

The court ruled that Capital One was not a debt collector as defined by the FDCPA even though it acquired the account in question after it was in default.

[debtzapper]

8 hours ago, BV80 said:

ARBITRATION

Schultz v. Verizon Wireless, 8th Circuit Court of Appeals, 2016

https://scholar.google.com/scholar_case?case=4041828204713421601&q="Schultz+v.+Verizon"&hl=en&scisbd=2&as_sdt=4,113,128
 
The consumers/plaintiffs sued Verizon for alleged violation of the Telephone Consumer Protection Act.  Defendant Verizon motioned to compel arbitration and the plaintiffs consented.

Before the lower court ruled on the motion to compel, the parties engaged in settlement negotiations.  Verizon offered a settlement figure but the plaintiffs refused to sign the settlement agreement because it contained a non-disparagement clause.  In other words, in exchange for the settlement amount, the plaintiffs could not trash Verizon and take any other adverse actions that would negatively affect the corporation.  It's standard in most settlement agreements.

Well, it appears the plaintiffs wanted to have their cake and eat it too.  They wanted both the settlement money and the ability to trash Verizon.

Needless to say, Verizon withdrew the offer and the court granted the motion to compel arbitration.  The plaintiffs then appealed stating that the settlement agreement should stand.  The lower court disagreed and ruled that there was no enforceable agreement due to the fact that the plaintiffs refused to agree to an essential part of the agreement.  The 8th Circuit agreed with the lower court.

One of the plaintiffs then attempted to argue that he was not a party to the agreement and could not be required to arbitrate.  Again, the lower court disagreed and the 8th Circuit affirmed.

Long story short:   When the money is about to be handed to you, don't get stupid.

Any debate on the issues?

 

FDCPA

Davidson v. Capital One Bank (USA) - 11th Circuit Court of Appeals, 2015

https://scholar.google.com/scholar_case?case=16309688109984798702&q="Fair+Debt+Collection+Practices+Act"&hl=en&as_sdt=3ff87fe0000000000000000000000000004

1692a(6)(F) states that the term "debt collector" does not apply to

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

The court ruled that Capital One was not a debt collector as defined by the FDCPA even though it acquired the account in question after it was in default.

Look at footnote 2:

https://scholar.google.com/scholar_case?case=13318286599495691683&q=capital+one+bank+fdcpa&hl=en&as_sdt=206

 

Contrary decisions. Despite the Eleventh Circuit’s assertion that its decision was compelled by the plain language of the FDCPA, other appellate courts have reached the contrary conclusion.

The U.S. Court of Appeals for the Sixth Circuit said that “For an entity that did not originate the debt in question but acquired it and attempts to collect on it, that entity is either a creditor or a debt collector depending on the default status of the debt at the time it was acquired” (Bridge v. Ocwen Federal Bank).

Similarly, addressing an unusual situation of a mortgage loan servicer that mistakenly believed a mortgage to be in default, the U.S. Court of Appeals for the Seventh Circuit said that “the Act treats assignees as debt collectors if the debt sought to be collected was in default when acquired by the assignee, and as creditors if it was not” (Schlosser v. Fairbanks Capital Corp.).

[BV80]

17 minutes ago, debtzapper said:

Look at footnote 2:

https://scholar.google.com/scholar_case?case=13318286599495691683&q=capital+one+bank+fdcpa&hl=en&as_sdt=206

 

Contrary decisions. Despite the Eleventh Circuit’s assertion that its decision was compelled by the plain language of the FDCPA, other appellate courts have reached the contrary conclusion.

The U.S. Court of Appeals for the Sixth Circuit said that “For an entity that did not originate the debt in question but acquired it and attempts to collect on it, that entity is either a creditor or a debt collector depending on the default status of the debt at the time it was acquired” (Bridge v. Ocwen Federal Bank).

Similarly, addressing an unusual situation of a mortgage loan servicer that mistakenly believed a mortgage to be in default, the U.S. Court of Appeals for the Seventh Circuit said that “the Act treats assignees as debt collectors if the debt sought to be collected was in default when acquired by the assignee, and as creditors if it was not” (Schlosser v. Fairbanks Capital Corp.).

Contrary opinions by other courts and the fact that this one is from a Circuit Court of Appeals is why I found the opinion to be interesting.