Appeals Court Overturns Judgment for Debt Collector in Letter Case

The Ninth Circuit Court of Appeals in San Francisco Wednesday reversed a federal judge’s ruling that validated a debt collection law firm’s practice of sending collection letters “in care of” a person’s place of employment. The three judge panel was split in their decision.

The appellate court sent the case back to the district from which it originated — Sacramento — for further proceedings but, in a fairly unusual move, granted permission to have the case reassigned to a different judge. The panel said that U.S. District Judge John A. Mendez exhibited an “unfortunate dismissive attitude” toward the suit, the attorney who filed it, and the request to grant class action certification.

The opinion allowed for the case to be granted class action status upon further review in Sacramento.

In the case, Evon V. Law Offices of Mickell (read the opinion), the law firm sent a collection letter addressed to the consumer to the Evon’s place of employment. The letter was opened by other people at the consumer’s office, including the business’ legal department, before it was delivered to Evon.

Mendez ruled in July 2010 that the practice of sending debt collection letters “in care of” employers without first obtaining permission from the debtor did not violate the federal Fair Debt Collection Practices Act (FDCPA).

But two of the three-judge panel of the 9th U.S. Circuit Court of Appeals said the practice carries an unacceptably high risk of unnecessarily stressing and embarrassing debtors, which is “precisely what the act is designed to prevent.”

The opinion was authored by Circuit Judge Betty B. Fletcher, who was joined by Circuit Judge Richard A. Paez. Circuit Judge John T. Noonan dissented.

“The majority supposes that a debt collection letter addressed to a debtor at (her) place of employment is a communication made to an indefinite number of persons in the employer’s business,” Noonan wrote. “Is there a general rule that letters to a person in care of the person’s employer will be opened? Nothing in my experience suggests that such is the rule or common practice in the United States. The majority invents a custom to confirm its conclusion.”