News & Views

Sixth Circuit Constrains Scope of FDCPA’s Mini-Miranda Requirement

Section 1692e(11) of the Fair Debt Collection Practices Act forbids:

the failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector

The “mini-Miranda” disclosure required by this section applies solely to “communications” that are not “formal pleadings.” Section 1692(2) of the Act provides that “the term ‘communication’ means the conveying of information regarding a debt directly or indirectly to any person through any medium.” In a relatively brief opinion applying basic rules of statutory construction, the United States Court of Appeals for the Sixth Circuit has issued a decision that may open the door to a new set of defensive arguments in FDCPA cases.

In Hardin v. Finkelstein, Kern, Steinberg & Cunningham, P.C.,  the plaintiff Hardin complained that the defendant law firm had allegedly violated the FDCPA by failing to include the mini-Miranda notice in four state-court documents.  Hardin had agreed to a judgment that was mistakenly entered in an incorrect amount.  After trying unsuccessfully to get Hardin to discuss the judgment error (and honor his agreed payment plan) the law firm sent him notice of a hearing on a motion to set aside the erroneous judgment.  The law firm also sent to Hardin a copy of the motion to set aside the judgment and the proposed order on that motion.  The state court set aside the erroneous judgment and then entered a new judgment in the correct amount.  The law firm then secured a judgment lien by filing the judgment with the County Register of Deeds.

After the law firm sent Hardin a letter giving notice of registration of the judgment lien he finally responded, asserting that he had never received a copy of the motion to set aside judgment, the order setting aside the judgment, the new judgment, or the judgment lien.  Hardin sued the law firm, alleging that, by failing to state in those four documents that it was a debt collector, the law firm had violated Section 1692e(11).

The law firm prevailed in the district court on a motion to dismiss the case for failure to state a claim. On appeal, the Sixth Circuit affirmed the dismissal of the case on an alternative basis, holding that the four documents were not actionable communications between a debt collector and consumer.

Noting that the mini-Miranda obligation, on its face, applies only to a “communication” with a consumer, the Court turned to the FDCPA’s definitional structure:

The FDCPA defines “communication” as the “conveying of information regarding a debt directly or indirectly to any person through any medium.” . . . A “debt collector” means “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”

The Court of Appeals then turned to the federal Dictionary Act, which  defines a person as “corporations, companies, associations, firms . . . as well as individuals.”  Affirming the district court’s dismissal of the action the Sixth Circuit held that the motion was not a communication because it was never received by Hardin.  The Court of Appeals further held that the agreed judgment, default judgment and judgment liens were not communications because they were judicial documents which were issued by “a nonperson” under the FDCPA, stating: “The adjudicative process cannot be construed as communications from the debt collector to the debtor.”

While the fact that the motion never was received by the consumer is certainly fact-specific, the Sixth Circuit’s conclusion that a court is not a “person” under the FDCPA could open the door to new defensive arguments in cases that are based upon the assumption that a statement to a court is either a “communication” under the Act or a representation to a “person.”