On February 28, 2020, a federal court largely rejected an attempt by LVNV Funding and Resurgent Capital Services to dismiss a putative class action filed by attorneys Kevin Abramowicz (of East End Trial Group; formerly of BCJ Law) and Mark Moynihan (of Moynihan Law).
The case concerns alleged violations of the Fair Debt Collection Practices Act (“FDCPA”) by LVNV and Resurgent. The putative class representatives claim LVNV and Resurgent falsely represented the nature and character of debt they sought to collect in Chapter 13 bankruptcy proceedings. The plaintiffs contend this practice was false, misleading, unfair, and unconscionable under the FDCPA.
LVNV and Resurgent sought to dismiss the case on various grounds. First, LVNV/Resurgent argued the bankruptcy code preempted the FDCPA, such that the plaintiffs could not bring claims under the FDCPA. Second, LVNV/Resurgent contended their alleged conduct was not false, misleading, unfair, or unconscionable under the FDCPA.
The court largely rejected the arguments asserted by LVNV and Resurgent. The court held that the FDCPA was not preempted by the bankruptcy code. The court also found that the alleged false representations made by LVNV and Resurgent constituted as false/misleading conduct in violation of the FDCPA. The court did, however, agree that LVNV and Resurgent’s conduct was not unfair or unconscionable within the meaning of the FDCPA. Ultimately, the court allowed the putative class action to proceed.