Meaningful Attorney Involvement: Another Case Tells Us What Doesn't Qualify, but What Does?

The ever-elusive question of what exactly is meaningful attorney involvement is once again not answered. In Boerner v. LVNV Funding et al., No. 17-cv-1786 (E.D. Wis. 2019), the court addresses the issue but ends up punting it to a jury. This case also addressed the right to cure under Wiconsin's consumer protection laws, but the summary below pertains solely to the meaningful attorney involvement issue.

Factual and Procedural Background

In this case, plaintiff fell behind on his credit card payments. The original creditor allowed plaintiff to make minimum payments while working to bring the account current. At some point while plaintiff was making minimum payments, the account was purchased by a debt buyer, which placed the account, along with the consumer’s debt file, with a collections law firm.

The collections firm sent a letter to plaintiff’s bankruptcy attorney containing the notice of validation rights as required by the Fair Debt Collection Practices Act (FDCPA). Neither the attorney nor plaintiff responded to this letter. The collections firm then went to file a lawsuit against plaintiff.

Prior to filing the lawsuit, the complaint was reviewed by one of the attorneys at the collections firm. When the law firm receives files from creditors, it inputs them into a computer system that provides easy access to the information.  The firm’s records contained two time stamps for this complaint, one at 4:04 that was placed after the attorney reviewed the complaint, and one at 4:05 when the complaint was sent to staff to prepare for filing. The collection attorney working on plaintiff’s case was listed as counsel of record for hundreds of cases throughout Wisconsin.

The Decision

On the issue of meaningful attorney involvement, the court denied summary judgment. The court found that the determination for whether the attorney involvement was meaningful is a question for trial, not summary judgment.

Editor’s Note: When deciding on a motion for summary judgment, the court looks to whether there is no issue of material fact and that the moving party is entitled to judgment as a matter of law.

In reviewing the matter, the court looked primarily to a Seventh Circuit case called Nielsen v. Dickerson that addressed similar questions. In Nielson, the Seventh Circuit took issue with the following:

[F]irst, the law firm only received information from accounts selected by the creditor—the law firm did not decide who to pursue, but simply conducted additional, ministerial screening. Second, the law firm did not receive the debtor's file, only the information needed to determine delinquency and draft the letter. Third, the review of the letters, even if conducted by an attorney, "did not call for the exercise of professional judgment. The most substantive aspect of this review involved checking an internal database to determine whether a debtor had declared bankruptcy and running a [screening] computer check." Fourth, the dunning letter was on a pre-written form letter that contained "no individualized assessment of the individual debtor's circumstances or her liability," and was issued in an "assembly-line fashion" that "betray[ed] the purely nominal nature" of the law firm's participation. The court found that the attorney's testimony that he spent two minutes reviewing one page containing forty accounts confirmed the "ministerial nature" of the review. Fifth, the firm was not authorized to resolve issues with the debtor, and routed almost all communication back to the creditor. Finally, the attorney never litigated on behalf of the creditor. The firm's efforts "amounted to no more than a veneer of compliance with the FDCPA.

(Internal citations omitted.)

The court found that certain factors favor defendants in this matter. For example, the law firm received the consumer’s entire client file from the debt buyer and the firm actively litigates matters on behalf of the specific debt buyer.

However, the court could not conclusively determine some of the other factors. The court could not determine who made the professional judgment on which cases to litigate. There was an issue about the consumer not receiving notice of his right to cure the account as the court determined was required. There was also evidence presented that usually a firm shareholder reviewed the file, but in this particular case a legal assistant did so (Editor's Note: The legal assistant's review was done three days prior to the review by the attorney who reviewed the complaint.)

Based on these open questions, the court reasoned that the question of meaningful attorney involvement in this matter is best for determination at trial.

insideARM Perspective

The issue of meaningful attorney involvement is far from clear and this decision does little to help shed light on the picture. How much time and in what depth is a collections attorney supposed to review a file to pass muster? Many court decisions tell us what fails to meet the standard, but don't often tell us what does. This forces the industry to slowly piece the picture together while at the same time fielding templated lawsuits from plaintiffs’ counsel.

When reviewing attorney’s fees, the courts are usually instructed to look at the complexity of the matter involved. They should do the same for meaningful attorney involvement cases. While collections lawsuits against consumers are serious, especially considering the impact such a suit may have to a consumer, litigation of such suits is not complex. The elements required to state a claim are simple and static. The files sent by creditors include all of the information needed to determine whether a suit is appropriate. These files are uniform and do not take a long time to review to ensure that the file is ripe for a suit.

There is a balance here somewhere. There is a way to protect consumers while also providing enough clarity so that collection law firms are not shooting in the dark hoping they are complying. However, without clear guidance, that balance will take longer to achieve and may ultimately harm consumers (e.g., decreased access to credit).