FTC determined that a debt collector who knows that a
debt is time-barred must tell the consumer that the debt
collector cannot sue to collect the debt and that making a
partial payment would allow the collector to sue to collect
the balance. Relying on the FTC report, the district court
found that the failure to disclose that a debt is time-barred
and that a partial payment would revive the debt collector’s
ability to sue may mislead consumers. Because the debt
collector’s dunning letter did not contain these disclosures
and contained an oer for “settlement,” the court denied the
defendants’ motions to dismiss.
e FTC and CFPB’s amici curae brief argues that the district
court properly denied the defendants’ motion to dismiss.
Specically, the FTC and CFPB argue that the “settlement”
oer has the potential for deception as it could lead the
consumer to believe that litigation would follow aer the
expiration of the settlement oer.
Say-On-Pay Voting
Dennis v. Hart, --- F.3d ---, 2013 WL 397752 (9th
Cir. 2013).
Plaintiffs Ronald Dennis and George Assad filed
consolidated shareholder derivative suits against
PICO Holdings, Inc. and its board members alleging
violations of state law in connection with the board’s
approval of executive compensation after a negative say-
on-pay vote. Defendants removed the case to federal
court and moved to dismiss plaintiffs’ claims. Plaintiffs
moved to remand. The district court dismissed some of
plaintiffs’ claims and remanded the remaining claims to
state court. Plaintiffs appealed the district court’s
dismissal of their claims, and defendants appealed the
district court’s decision to remand the cases to state court.
On appeal, defendants rst argued that Section 27 of the
Exchange Act conferred federal jurisdiction over plainti ’s
claims. However, the court rejected this argument, nding
that plaintis did not allege a violation of the Exchange Act
September 2013
e Dodd-Frank Wall Street Reform and Consumer
Protection Act was enacted as a measure to promote nancial
stability and protection for consumers through increased
regulation of nearly every aspect of the consumer nance
industry. In the two years since its enactment, the Dodd-
Frank Act has led to signicant industry reforms and the
promulgation of numerous new laws and regulations. In an
eort to stay apprised of these signicant industry changes,
Burr & Forman’s Dodd-Frank Newsletter will serve as a
periodic update of recent case law, news, and developments
related to the Dodd-Frank Act.
- - RECENT CASES - -
CFPB Involvement in Litigation
Delgado v. Capital Management Services, LP, Case
No. 13-2030 (7th Cir. Aug. 14, 2013).
The FTC and CFPB recently filed an amici curae
brief supporting the U.S. District Court for the Central
District of Illinois’s decision denying defendants’ motion
to dismiss Plaintiff Juanita Delgado’s Fair Debt
Collection Practices Act (“FDCPA”) claims.
Delgado led a putative class action against a defendant
debt collector and its aliated companies alleging violations
of the FDCPA aer the debt collector sent her a dunning
letter attempting to collect a debt upon which the statute
of limitations had expired. Defendants moved to dismiss
arguing that the dunning letter did not contain a threat to
sue and, thus, Delgado’s FDCPA claim failed as a matter of
law. Defendants also argued that they were not required to
disclose that the debt was time-barred.
Rejecting the defendants’ argument, the district court relied
on an FTC report, e Structure and Practices of the Debt
Buying Industry (Jan. 2013), http://1.usa.gov/Z0EjxZ, which
found that failing to disclose that a debt is time-barred may
be deceiving and encourage consumers to make a payment,
which would revive the debt. Based on its ndings, the
