Portfolio Recovery Associates Also Wins Appeal Against State AG

Debt buyer Portfolio Recovery Associates (Nasdaq: PRAA) said Wednesday that an appeals court in Missouri has upheld a lower court’s dismissal of a lawsuit filed against the firm by that state’s attorney general.

The case, State of Missouri v. Portfolio Recovery Associates, Inc. et al., which alleged that PRA and Portfolio Recovery Associates, LLC violated Missouri’s Merchandising Practices Act (MPA) by engaging in unfair debt collection practices, was previously dismissed by the Circuit Court of the City of St. Louis last June.

On April 5, 2011, the Missouri Court of Appeals Eastern District affirmed last year’s decision by The Circuit Court, again rejecting Missouri Attorney General Chris Koster’s attempt to apply the MPA to debt collection. In its ruling, the Court of Appeals commented that “we cannot undertake a legislative role and write into the MPA language that simply does not exist.”

The case is identical to one highlighted – and lightly mocked – on insideARM.com Wednesday. The two cases, although very similar, were separate and unrelated.

In August 2009, Koster blindsided PRA and Missouri collection agency Professional Debt Management with two separate but similar lawsuits. Both cases have seen parallel tracks through the trial and appeals process, with both culminating in the latest affirmation of the cases’ dismissals.