Last Friday the Third Circuit Court of Appeals issued a per curiam, non-precedential, opinion in favor of a debt collector in a Fair Debt Collection Practices Act (FDCPA) case involving a claim that the validation notice in a letter “was not sufficiently prominent or readable to satisfy the requirements of § 1692g of the FDCPA.  The case is Jewsevskyj v. Financial Recovery Services, Inc. (Case No, 16-4086, Third Circuit Court of Appeals).

A copy of the court’s opinion can be found here

Background

Financial Recovery Associates, Inc. (FRS) is a debt collector. FRS was hired to collect an account owned by LVNV Funding, and sent a letter to Alexandra Jewsevskyj advising her that LVNV Funding purchased a debt she owed in the amount of $1,128. The body of the letter is typed in all uppercase letters, in Times New Roman style, and in 8-point font. 

There was minimal spacing between the lines in each of the three full paragraphs on the front page and thus the text is compressed. The second paragraph of the letter contains what is commonly referred to as the “validation notice,” which describes a mechanism for Jewsevskyj to contest the debt. 

Jewsevskyj brought a putative class action against Financial Recovery Services, Inc. (“FRS”), LVNV Funding, Inc., Resurgent Capital Services, L.P., and Alegis Group, LLC (collectively, “Defendants”), claiming that FRS did not provide Jewsevskyj adequate notice of her right to contest an alleged consumer debt, as required by § 1692g of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692g. Jewsevskyj alleged that LVNV Funding, Inc., Resurgent Capital Services, L.P., and Alegis Group, LLC were all vicariously liable for the conduct of FRS.  

After discovery, the parties filed cross-motions for summary judgment.

Editor’s NoteA motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial. 

The District Court granted Defendants’ motion and denied Jewsevskyj’s, finding that, from the perspective of the “least sophisticated debtor,” the validation notice was not overshadowed by other aspects of the letter and was sufficiently prominent to put Jewsevskyj on notice of her right to contest the debt.

Jewsevskyj appealed the District Court decision. 

The Third Circuit Opinion 

The court determined that, although the letter was printed in a small typeface and the words and spacing were compressed, the language was clear and effectively conveyed to Jewsevskyj her §1692g rights. Therefore, the court affirmed the district court decision.

From the opinion: 

“Here, although the format is compressed and the font is small, our inquiry focuses on whether the notice is free from language or formatting choices that contradicts or overshadows the notice. There is no language that contradicts the notice and the recipient’s right to obtain information about the debt. Moreover, because the notice language is in the same font and format as the rest of the letter, there is nothing more prominent than the notice. 

Furthermore, the notice is placed on the first page of the letter and is written in plain English. While font size and format could render a notice unreadable, we cannot conclude that the notice here fits in that category as it is concise and legible, and is not misleading, confusing, or overshadowed by anything else in the letter.” 

insideARM Perspective 

This is a positive case for the ARM industry even though the opinion is non-precedential.

Editor’s Note: A “non-precedential opinion” generally, means that it may not be cited in briefs submitted to the Court. 

Readers are also cautioned to not read the opinion too literally. It does not mean that the court is saying that every letter using a compressed format and 8-point Times New Roman style font complies with FDCPA requirements. The district court and the Third Circuit found the notice acceptable in light of all of the facts in the case. The notice was on the first page of the letter. There was no language that contradicted the validation notice. The notice was in the same font and format as used in the rest of the letter. 


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