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Media Alerts - Jensen v. Pressler & Pressler, LLP - Third Circuit
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July 2, 2015
  Jensen v. Pressler & Pressler, LLP - Third Circuit
Headline: Third Circuit Holds False Statement Must be Material to Violate FDCPA

Area of Law: Fair Debt Collection Practices Act ("FDCPA")

Issues Presented: Must a false statement in a communication from a debt collector to a debtor be material in order to be actionable under the FDCPA?

Brief Summary:

A credit card debtor asserted that debt collectors violated the FDCPA provision barring false statements in collection of debt. In a subpoena, the collectors misidentified the County Clerk. The Court examined the issue of materiality and the "least sophisticated debtor" standard to establish that they both ultimately relate to the effect the communication could have on the least sophisticated consumer's decision making. The court determined that the inclusion of the wrong clerk's name itself was not material because it could not possibly have affected the least sophisticated debtor's ability to make intelligent decisions. The Court affirmed the grant of summary judgment to the Collectors.

Extended Summary:

Paula Jensen defaulted on her Bank of America credit card, and her debt was sold to Midland Funding, LLC ("Midland"). Midland retained the law firm of Pressler & Pressler ("Pressler") to help collect the debt. Midland received a default judgment against Jensen in the Superior Court of New Jersey. An information subpoena was issued to Jensen. Under New Jersey rules, attorneys are allowed to issue subpoenas in the name of the clerk of the court. Therefore, information subpoenas properly bear the signature of the clerk, even though the clerk does not sign the subpoena and may not have any knowledge of it. Pressler sought to enforce a judgment from the Superior Court of New Jersey, and therefore, the Superior Court clerk's name should have appeared on the signature line. Pressler mistakenly listed the former County Clerk of Warren County, "Terrence D. Lee," on the clerk's signature line. Lee had never worked as a clerk for the Superior Court. Jensen responded with a letter to Pressler explaining that the information subpoena was fraudulent because Lee was not the Superior Court's clerk.

Jensen then moved to vacate the state court judgment against her and that motion was denied. Soon after, she filed a putative class action against Pressler and Midland ("Collectors") in the U.S. District Court for the District of New Jersey, alleging a violation of § 1692e of the FDCPA, which prohibits making false, misleading, or deceptive statements in the collection of consumer debts. The District Court granted summary judgment in favor of the Collectors and denied Jensen's cross motion for summary judgment, concluding that the misuse of Lee's name was not a material statement and therefore, there could be no liability under § 1692e. The Third Circuit agreed that Jensen was correct as a factual matter that Lee's electronic signature was a false representation in the technical sense of the phrase, but the Court went on to find the statement was not material within the statute's intent.

Under the "least sophisticated debtor" objective standard, a false statement is only actionable under the FDCPA if it has the potential to affect the decision-making process of the least sophisticated debtor, meaning that an objective debtor must view the false statement as material. The Court explained that the materiality requirement is simply another way of expressing the least sophisticated debtor standard, as a debtor cannot be confused, deceived, or misled by an incorrect statement unless it is material. This effectuates the purpose of the FDCPA by precluding claims based on hyper technical issues that would not affect the actions of the least sophisticated debtor.

The Court determined that the inclusion of Lee's name on the information subpoena was not material, as it could not possibly have affected the least sophisticated debtor's understanding of the information presented. Under New Jersey rules, the clerk's signature does not verify that the clerk has seen or even knew about the document, and therefore, the information subpoena was not invalid. New Jersey courts have repeatedly declined to invalidate similar documents based on hyper technical errors, some with more errors than in this case.

Finally, summary judgment was appropriate because no reasonable juror could find that the mistake in this case was material. District Court affirmed.

Find the full opinion at:

Panel: McKee, Chief Judge, Rendell and Fuentes, Circuit Judges

Argument Date: March 18, 2015

Date of Issued Opinion: June 30, 2015

Docket Number: No. 14-2808

Decided: Affirmed

Case Alert Author: Jessica Wood


Sergei Lemberg, Esq. for Appellant
Mitchell L. Williamson, Esq., Michael J. Peters, Esq. for Appellee Pressler & Pressler
Lauren M. Burnette, Esq. for Appellee Midland Funding LLC

Author of Opinion: McKee, Chief Judge

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/02/2015 09:57 AM     3rd Circuit  

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