Court Opinion

ID: 9490636
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:49:54.045123+00
Date Added: 2024-06-11T17:54:13.465889
License: Public Domain

RIPPLE, Circuit Judge,
dissenting.
I respectfully part company from my colleagues because, in my view, the majority opinion effectively contradicts both our own precedent and that of the Supreme Court of the United States. Indeed, the Supreme Court, in this very ease, held that lawyers who regularly collect debts through the use of litigation are subject to the requirements of the FDCPA. Today, the majority goes a long way toward creating the very exemption for lawyers under the FDCPA that the Supreme Court, and this court in its earlier opinion, rejected. I also cannot agree with the majority’s assessment of the record or its view of the applicability of the bona fide error defense.
Under the terms of the Act, a debt collector is not liable if the debt collector is able to show by a preponderance of the evidence that “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” 15 U.S.C. § 1692k. Because the statute places the burden on the debt collector to establish this exemption, the debt collector — not the debtor as the majority appears to suppose— also has that burden on summary judgment.
1.
I first turn to the issue of whether the debt collector has established that it did not know of the client’s improper practices.
The majority, assuming that Mrs. Jenkins has the burden on the matter, holds that Mrs. Jenkins has not “set forth specific facts from which it might reasonably be inferred that the defendants did in fact know of the bank’s allegedly improper practices.” Ante, at 831. Respectfully, I must disagree both with respect to the majority’s shifting of the burden and with respect to the substance of the evidence.
The majority assesses the record by examining each evidentiary submission in vacuo and declaring that, standing alone, it is not sufficient to support a verdict in favor of Mrs. Jenkins. However, the evidence must be assessed not as if each submission existed in isolation, but in its totality. When assessed appropriately, the evidence would allow a jury to conclude that the defendants’ alleged error was not unintentional. For example, in Burris’ opinion letter to Gainer Bank, Burris provides the defendants’ “legal analysis and formal opinion ... concerning Gainer Bank[’]s current practice and use of ‘Forced Placed Collateral Insurance’ in the Consumer Loan contexts.” R.107, Ex.3 at 1. From this language, a jury could reasonably infer that Mr. Burris was familiar with and knew the bank’s “current practice and use” of FPCI. It would be quite unusual for an attorney to render a legal opinion on the bank’s use of FPCI without knowing the nature of that practice and without examining the bank’s contract with its FPCI insurer.
Further, in Burris’ letter, he warns the bank that, in light of the “Mellon Bank situation,” he and the bank should review the current provisions of its consumer loan contracts and its “practices with regard to forced placing insurance.” Id. at 829. Again, it would be very strange for Burris to refer to the Mellon Bank situation in an opinion letter without at least a basic understanding of what that matter involved and how it was related to his client’s situation. Indeed, Burris’ use of this short-hand designation, the Mellon Bank situation, makes little sense un*836less both Burris and Stewart, the addressee of Burris’ letter, already knew the nature of that litigation. Certainly, if his client did not know, one would expect that a lawyer would have elaborated further, especially with respect to the numerous allegations in the Mellon Bank complaint (many of which are similar to Mrs. Jenkins’ allegations). Without such an explanation, Burris hardly could have expected the bank to determine whether a further review of its practices was warranted. Even if Stewart were ignorant of the Mellon Bank litigation, a jury could certainly infer from this letter that the letter evinced Burris’ own knowledge of the Mellon Bank situation and its implications for Gainer Bank. In short, this letter hardly establishes the debt collector’s burden of proof on the issue of whether the violation was unintentional.
The majority also rejects precipitously the possibility that the other documents in the record, when assessed in light of the letter, support the conclusion that the law firm was aware that the bank adds unwarranted costs to a customer’s loan balance. The majority disparages the relevance of these documents because they require inferences from information that was not in the defendants’ possession. Referring to the Bates stamp numbers, my colleagues denigrate the significance of these documents because “for the most part, the bank produced these documents.” Ante, at 831. Although many of the documents were produced by the bank, a number of the documents bear the defendants’ Bates stamp marking; at least five documents attached to Mrs. Jenkins’ response to the defendants’ motion for summary judgement bear the “BHBM” (defendants’) Bates stamp and make reference to an insurance claim by the bank for reimbursement of repossession fees or skip claims. One document states explicitly that a “skip claim [was] pending via Garden City Ins[uranee].” R.107, Ex.9 at BHBM00096. Another document refers to an insurance skip payment that the bank received and that was credited toward the customer’s outstanding balance.
These documents produced from the defendants’ own files, coupled with Burris’ opinion letter, would permit a jury to infer that the defendants knew of the additional insurance that was purchased to cover “skip claims.” I therefore cannot join in the panel’s decision to deprive Mrs. Jenkins of her day in court on the issue of whether the defendants have demonstrated, as a matter of law, that the error was unintentional.
2.
Even assuming that the defendants demonstrated as a matter of law that their error was unintentional, to escape liability they also must show that the violation “resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” 15 U.S.C. § 1692k. Here again the defendant debt collectors hardly establish that they are entitled to judgment as a matter of law with respect to this aspect of their defense. They simply have not established a bona fide error defense.
As the majority notes, the defendants have in place a detailed pre-litigation procedure to avoid some types of errors. These procedures are designed to combat problems of transposing numbers and similar problems. But that is not the kind of error at issue here. The alleged violation here is that the defendants brought suit for amounts not authorized by the insurance contract; by including these amounts within the complaint, the defendants violated the Act. On this record, there is no showing that the defendant debt collectors had in place a system designed to catch this sort of error. Thus, the bona fide error defense has not been established as a factual matter.
3.
I have, however, a more fundamental disagreement with the majority’s view of the bona fide error defense. I cannot agree with its conclusion that the defendants can escape the strictures of the Act because their activities were those of debt collectors, not lawyers. The record makes clear that the defendants were engaged in collecting a debt for their client through the practice of law. It is not disputed that they were using devices that the law only permits lawyers to *837use to collect the debt. They had commenced a lawsuit on behalf of their clients. On the letterhead of the law firm, they had sent a letter in an attempt to obtain payment. My colleagues write that “[t]he letter-the centerpiece of Jenkins’ claim — has nothing lawyerly about it (except, of course, its letterhead).” Ante, at 832. The concession is no mean matter. See Avila v. Rubin, 84 F.3d 222, 229 (7th Cir.1996) (“An unsophisticated consumer, getting a letter from an ‘attorney,’ knows the price of poker has just gone up.”).
More importantly, the letter itself will not bear the majority’s characterization that it is the letter of a debt collector, not a lawyer, and that therefore its writer cannot be held liable for legal errors. The Supreme Court has precluded this conclusion. Justice Breyer’s opinion in this case for a unanimous Court held that lawyers were not exempt from the Act. He relied in part on the letter in question: “As part of an effort to settle the suit, a lawyer with [defendants’] law firm, George Heintz, wrote to Jenkins’ lawyer.” Heintz v. Jenkins, 514 U.S. 291, 293, 115 S.Ct. 1489, 1489, 131 L.Ed.2d 395 (1995) (emphasis added). Thus, the Court’s opinion is premised on the point that this court now negates. Heintz was engaged in “lawyerly” conduct; settling lawsuits is something lawyers do every day.
Further, the letter itself makes clear that this was a settlement overture between two lawyers trying to resolve the suit. The letter was sent on defendants’ firm letterhead to Mrs. Jenkins’ lawyer. In the letter, Heintz states that the letter is “an attempt to amicably resolve this matter.” R.49, App.A at 1. From the context of the letter, however, the phrase “this matter” refers not simply to the underlying debt, as the majority appears to assume, but to the underlying lawsuit. Indeed, just above the attorney/addressee’s name, the letter indicates that the communication was sent regarding “Gainer Bank vs. Darlene Jenkins[,] 89M1-147179.” Id. Although defendants’ ultimate goal may have been to resolve the underlying debt issue, this letter involved a case settlement negotiation between two adversary lawyers. See Avila, 84 F.3d at 229 (“A letter from an attorney implies that a real lawyer, acting like a lawyer usually acts, directly controlled or supervised the process through which the letter was sent.”).
The majority’s characterization of the defendants’ activities is not a simple misjudgment of the facts of the case. At bottom, the majority misinterprets the bona fide error defense under the FDCPA and seriously undermines the Supreme Court’s decision in this case. In the majority’s view, even when a lawyer uses those tools reserved exclusively for those who have a license to practice law, the lawyer is liable under the Act only for the same sorts of misfeasance as a non-lawyer. The majority suggests that, if a lawyer/debt collector has breached his duty as a lawyer, Rule 11 sanctions (or the equivalent state law remedy) may be appropriate, but a civil penalty under the FDCPA is not.* Only in this way, suggests the majority, are lawyers treated the same as other debt collectors under the Act. Requiring a lawyer to fulfill the duty imposed by Rule 11 (or an equivalent state provision), in the majority’s view, holds lawyers to a higher standard than the Act requires.
I cannot agree. Lawyer/debt collectors collect debts in a manner distinctly different from the means available to others. Lawyers can bring lawsuits on behalf of their clients; only lawyers can utilize in this special way the legal machinery of the sovereign. To hold that the FDCPA requires lawyers to meet the duties imposed upon them as attorneys does not discriminate against lawyers. It simply requires that lawyers use responsibly the special weapons that are entrusted to them. My colleagues portray the attorney/debt collector as a Janus-like entity who, *838in the course of collecting a single debt for his client, is sometimes attorney engaged in debt collection and sometimes debt collector engaged in debt collection. However, the Supreme Court has made it clear: He is a debt collector who, because of the special tools at his disposal, can violate the Act in especially potent ways.
As the Supreme Court noted, the Congress focused explicitly on lawyers during its consideration of the legislation and determined that they ought to be held liable for sanctions under the Act. Congress’ explicit attention to the role that lawyers play in debt collection renders too facile the majority’s suggestion that only judicial sanctions can be used to remedy any violations of a lawyer’s duty in or out of the courtroom and that the FDCPA provides remedies only for violations that every debt collector can commit. Sanctions are designed to ensure the fair and efficient conduct of litigation in the courts. The purpose of the FDCPA is quite different: It is “to protect consumers from abusive, deceptive, and unfair debt collection practices.” Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322, 1324 (7th Cir.1997). To say that judicially-imposed sanctions are sufficient to vindicate Congress’ interest in preventing abusive, deceptive or unfair debt practices when that practice is litigation is to undercut the intent of Congress in enacting the legislation and to render lawyers immune from accountability for the very special sort of damage they alone are able to do to the individual consumer and to the economy. The Supreme Court earlier ruled in this case that lawyers are subject to the strictures of the FDCPA. By holding that the sole remedy for attorney abuses in debt collection actions is judicial sanctions, the majority today gives the defendants much of what the Supreme Court and Congress refused to provide: a litigation exception to the FDCPA. According to the majority, no matter how much damage their abusive lawyering works on the sector of the economy protected by the Act, lawyers have no duty under the FDCPA. Although they can bring to bear one of the most powerful tools in debt eolleetion-the ability to engage in litigation to collect debts (something that no other type of debt collector can do) — , they are immune from the accountability required of everyone else. This view is contrary to the Supreme Court decision in Jenkins and to Avila, 84 F.3d at 229 (noting that a letter from an attorney with the “attorney’s signature implies the attorney has formed a professional judgment about the debtor’s case”). In my view, the defendants were required to exercise their professional judgment as attorneys before commencing litigation and sending a letter to Mrs. Jenkins or her attorney on law-firm letterhead.
I respectfully dissent.

 The majority rejects Mrs. Jenkins’ interpretation of the statute because, says the majority, it would vitiate the bona fide error defense for a lawyer’s attempts to collect an amount that, as it turns out, is not legally authorized by the contract. I do not see how this naturally follows. Lawyers/debt collectors would have the same protection from the bona fide error defense as anyone else. If the lawyer has in place a set of procedures reasonably adapted to avoid the type of error alleged — attempting to collect legally unauthorized amounts through litigation — the defense is available.