Repo lawsuit and Attached Wages

Lawyers were originally excluded from the definition of "debt collector." In 1986,
Congress removed the attorney exemption. See P.L. 99-361, 100 Stat. 768, deleting former 15
U.S.C. ????1692a(6)(F), which excluded from the definition of "debt collector" "any attorney-at-law
collecting a debt as an attorney on behalf of and in the name of a client."
Now, the "FDCPA does apply to a lawyer . . . with a general practice including a
minor but regular practice in debt collection." Crossley v. Lieberman, 90 B.R. 682, 694
(E.D.Pa. 1988), aff'd, 868 F.2d 566 (3d Cir. 1989). The legislative history of the amendment
states that collection attorneys were not being effectively policed by the legal profession and
courts, and that the removal of the exemption was necessary to "put a stop to the abusive and
harassing tactics of attorney debt collectors." 1986 USCCAN 1756-57.
In Heintz v. Jenkins, 514 U.S. 291 (1995), the United States Supreme Court held
that litigation conduct of attorneys in collecting consumer debts is not exempt from the FDCPA,
rejecting the arguments of the collection bar to the contrary. Unlawful conduct by collection
attorneys in court proceedings is now covered, assuming that there is no Rooker-Feldman or res
judicata bar. Watkins v. Peterson Enterprises, Inc., 57 F.Supp.2d 1102 (E.D.Wash. 1999)
(unauthorized costs in connection with state court garnishments). However, some judges are
nevertheless still reluctant to find violations based on the contents of pleadings. Argentieri v.
Fisher Landscapes, Inc., 15 F.Supp.2d 55 (D. Mass. 1998). The court retreated from this position
on a motion to reconsider, stating that "I do not suggest here that claims filed in court could not, if
intended to harass a debtor, be actionable under the FDCPA." Argentieri v. Fisher Landscapes,
Inc., 27 F.Supp.2d 84 (D. Mass. 1998). Contra, Strange v. Wexler, 796 F.Supp. 1117, 1118 (N.D.
Ill. 1992).
The amount of collection activity necessary to make a lawyer a "debt collector" --
one who "regularly" collects consumer debts -- is minimal. Goldstein v. Hutton, Ingram, Yuzek,
Gainen, Carroll & Bertollotti, 374 F.3d 56 (2d Cir. 2004) (trier of fact could find law firm was
subject to FDCPA based on 145 demands during one year even though attorney only received $
5,000 in revenues amounting to 0.05% of its $ 10,000,000 revenue over that period). The
Goldstein court considered relevant ???????(1) the absolute number of debt collection communications
issued, and/or collection-related litigation matters pursued, over the relevant period(s), (2) the
frequency of such communications and/or litigation activity, including whether any patterns of
such activity are discernable, (3) whether the entity has personnel specifically assigned to work
on debt collection activity, (4) whether the entity has systems or contractors in place to facilitate
such activity, such as use of mailing services, collection software, and use of form letters, and (5)
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whether the activity is undertaken in connection with ongoing client relationships with entities
that have retained the lawyer or firm to assist in the collection of outstanding consumer debt
obligations???????, as well as (6) ???????whether the law practice seeks debt collection business by marketing
itself as having debt collection expertise???????. Factor (5) includes relationships with collection
agencies, ???????lenders or other creditors, landlords or other lessors, and service providers ???????.
In Oppong v. First Union Mortgage Corp., 02-2149, 2006 U.S.Dist. LEXIS 37551
(E.D.Pa. Dec. 29, 2005), the court held that ???????debt collectors are those who frequently and
consistent perform debt collection activities as part of their business services,??????? regardless of ???????the
percentage of debt collection business in relation to the defendant????????s other business,??????? so that
acquiring 89 delinquent mortgages within 3 months (356 per year) resulted in ???????regularly???????
collecting delinquent debts regardless of the fact that 141,000 were acquired that were not
delinquent. The percentage of collection activity was relevant under the ???????principal purpose??????? part
of the test.
A law firm's debt collection work which amounted to less than 4% of its total
business brought it within the definition. "While the ratio of debt collection to other efforts may
be small, the actual volume is sufficient to bring defendant under the Act's definition of 'debt
collector.'" Stojanovski v. Strobl & Manoogian, P.C., 783 F.Supp. 319, 322 (E.D.Mich. 1992).
An attorney who represented four collection agencies, filed over 150 collection suits in a two-year
period, and sent one particular collection letter over 125 times in a 14-month period was a debt
collector even though debt collection was merely incidental to his primary law practice. Cacace
v. Lucas, 775 F.Supp. 502 (D.Conn. 1990). Another decision holds that sending 60 collection
letters during a period of several weeks is sufficient. Tragianese v. Blackmon, 993 F.Supp. 96 (D.
Conn. 1997). On the other hand, an attorney who collected less than 20 consumer debts in a 10-
year period was not a debt collector. Mertes v. Devitt, 734 F.Supp. 872 (W.D.Wis. 1990).
In two questionable decisions, courts held that a nascent collection lawyer who
sent out about two dozen or three dozen letters at one time was not engaged in regular debt
collection. Mladenovich v. Cannonito, 97 C 4729, 1998 WL 42281,1998 U.S. Dist. LEXIS 985
(N.D. Ill., Jan. 29, 1998) (two dozen); White v. Simonson & Cohen, 23 F.Supp.2d 273 (E.D.N.Y.
1998) (35 letters sent on one occasion not enough).
A lawyer should be classified as a "debt collector" if either a volume threshold or a
percentage-of-time threshold is met, or if the lawyer holds himself out as engaging in consumer
debt collection. A volume threshold is necessary because a law firm that handles a modest
number of consumer collection matters as part of providing a full range of services to its clients
should be required to comply with the FDCPA. One court has held that "It is the volume of the
attorney's debt collection efforts that is dispositive, not the percentage such efforts amount to in
the attorney's practice." Stojanovski v. Strobl & Manoogian, P.C., 783 F.Supp. 319, 322
(E.D.Mich. 1992), citing Cacace v. Lucas, 775 F.Supp. 502, 504 (D.Conn. 1990); In re Littles, 90
Bankr. 669, 676 (Bankr. E.D. Pa. 1988), aff'd as modified sub nom., Crossley v. Lieberman, 90
Bankr. 682 (E.D. Pa. 1988), aff'd, 868 F.2d 566 (3d Cir. 1989). But see Hartl v. Presbrey &
Assoc., 95 C 4728, 1996 WL 529339, 1996 U.S.Dist. LEXIS 13419 (N.D.Ill., Sep. 16, 1996);
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Nance v. Petty, Livingston, Dawson & Devening, 881 F.Supp. 223 (W.D.Va. 1994). The Fifth
Circuit has held that a law firm that sent out 600 demand letters was a "debt collector"
notwithstanding the fact that only a small fraction of its time was spent in that activity. Garrett
v. Derbes, 110 F.3d 317 (5th Cir. 1997).
A percentage threshold and a "holding out" test are also necessary because the
FDCPA should apply to (i) a lawyer with a nascent collection practice and (ii) a lawyer who
attempts to obtain collection business, even if he is not successful in obtaining very much of it.