Baltimore Litigation Team of Rea and Gamble Wins Dismissal of Fair Debt Collection Practices Act Class Action

Baltimore Litigation Team of Rea and Gamble Wins Dismissal of Fair Debt Collection Practices Act Class Action

In a 20-page Memorandum Opinion issued on May 31, 2013, the U.S. District Court for the District of Maryland dismissed a multi-million-dollar class action against a firm client that manages residential rental properties. The Complaint alleged that the client violated the federal Fair Debt Collection Practices Act (“FDCPA”), and related state statutes, by providing misleading communications to judgment debtors through counsel that ultimately resulted in their arrests and body attachments for failure to appear at court ordered hearings.

In their Motion to Dismiss, Donald A. Rea and Geoffrey M. Gamble, members of the Commercial Litigation Practice, argued that property management companies do not constitute “debt collectors” subject to the FDCPA and that the communications at issue were not fraudulent or misleading. Inasmuch as the client sought to collect the debts at issue in its own name, it is not defined as a debt collector under 15 U.S.C. § 1692a. The District Court agreed and dismissed the FDCPA claims with prejudice.

The Court similarly held that the property management company cannot be found vicariously liable for the conduct of its attorney as a matter of law.

June 13, 2013