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7th Circuit rules on debtor issues

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The 7th Circuit Court of Appeals handed down a decision today addressing issues that have frequently arisen under the Fair Debt Collection Practices Act, which have caused some splits at the Circuit level. In its opinion, the court combined two cases from Indiana and two from Illinois that dealt with similar issues.

The four cases in the opinion include Tammy A. Evory, et al. v. RJM Acquisitions Funding LLC, et al., 06-2130 to 2132, 06-2134, and 06-2157, and Kevin I. Captain v. ARS National Services, Inc., 06-3129 from the U.S. District Court, Southern District of Indiana, Indianapolis Division. Judge David Hamilton presided over both cases. The Illinois cases are Kelly and Karla Lauer v. Mason, Silver, Wenk & Mishkin, LLC, et al., 06-2271 and Philip Jackson, et al. v. National Action Financial Services Inc., et al., 06-3162, 06-3327-06-3439, and 06-3446.

In the opinion authored by Circuit Judge Richard Posner, the court determined there are three overlapping groups of issues to be addressed: the application of the Fair Debt Collection Practices Act, 15 U.S.C. 1692, to lawyers; the proper treatment under the act of settlement offers; and the role of Federal Rules of Civil Procedure12(c) in deciding claims of violations of section 1692e.

The 7th Circuit concluded that any written notice sent to the attorney of a consumer being contacted by a debt collector must contain the same information required by the act that would be sent to the consumer directly. It would be odd if a consumer with an attorney would be excused from receiving information to which he or she is entitled under the statute, wrote Judge Posner.

In the opinion, the judges decided that a representation by a debt collector that would not deceive a competent attorney, even if he or she is not a specialist in consumer debt law, would not be actionable under the act; however misleading or misrepresentation toward an attorney with information a lawyer may not be able to determine, such as the balance of the consumer's debt, would be actionable.

In terms of proper treatment under the act of settlement offers, the 7th Circuit wrote the settlement offers should include language such as "We are not obligated to renew this offer," so even unsophisticated consumers can understand that the debt collector may or may not present a similar offer again. Consumers often interpret offers such as "act now and receive 30 percent off ... if you pay by March 31st" or "we would like to offer you a unique opportunity to satisfy your outstanding debt" as one-time only offers and may not have any further opportunity to settle their debt for less than the full amount if they do not take the offer at that time. By using terms such as "not obligated," the debt collector can let the consumer know the company may or may not extend this offer again.

The 7th Circuit reversed and remanded Evory, Captain, and Lauer for further proceedings consistent with the opinion. In Captain, the 7th Circuit ruled that the District Court erred in dismissing the complaint for failure to state a claim because settlement-offer charges are lawful under the act and the challenge to the lawfulness of the $15 a day representation was made to a lawyer.

In Evory, which is a pure settlement-offer case with no communication with attorneys, the 7th Circuit ruled the dismissal of the complaint was an error.

In Lauer, the 7th Circuit ruled the District Court's dismissal of the plaintiff's complaint on grounds that the communications with a consumer's attorney are beyond the reach of the act was an error.

The court affirmed Jackson.

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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