Debt collector escapes Federal Debt Collection Practices Act lawsuit in federal court despite losing in state

By Charmaine Little | Jun 6, 2019

PHILADELPHIA – The U.S. District Court for the Eastern District of Pennsylvania has dismissed two lawsuits against a debt buyer and its attorneys because the plaintiffs failed to plead any deceptive conduct.

“Plaintiffs have not pleaded any specific deceptive or unconscionable conduct, but seemingly rely on the fact that they prevailed in the underlying collection lawsuit… Because a lawsuit can be lost for many reasons, an inference of unlawful conduct does not inexorably follow, with the result that plaintiffs’ claims will be dismissed,” Judge Gerald Austin McHugh ruled May 22.

Gloria Ramos and Rojelio Ramos separately sued LVNV Funding LLC and the law firm that represents it, Pressler & Pressler LLP, over claims that they violated the Federal Debt Collection Practices Act (FDCPA) and the state's Fair Credit Extension Uniformity Act (FCEUA).

LVNV previously sued both plaintiffs in Philadelphia Municipal Court, where a judge ruled in the Ramoses' favor. The ruling states no reasoning was provided in the dispositive orders.


U.S. District Court Judge Gerald Austin McHugh Jr.  

The plaintiffs' suits allege the defendants told them they had to make payments that they did not owe, demanded payment of a debt they did not owe and sued for a debt they did not owe.

McHugh agreed that LVNV is actually a debt collector, but disagreed with LVNV's argument that the plaintiffs should have filed counterclaims in Philadelphia Municipal Court. 

“This argument fails in all respects,” the judge wrote. “Under the Pennsylvania Rules of Civil Procedure, counterclaims are permissive, not compulsory.”

Still, McHugh ruled the plaintiffs didn’t properly state a claim under the FDCPA to argue their points.

"They plead that they did not borrow from LVNV, but such allegations lack substantive import because, by plaintiffs’ own theory of the case, LVNV does not extend credit or lend,” said the judge.

The plaintiffs argued that because the Municipal Court found in their favor, then the alleged debt was invalid and any attempt to collect it is a violation of the FDPCA.

“The fact that LVNV failed to prevail in its case does not by itself establish LVNV never owned the debt, that its attempts to collect were deceptive in nature, or that its filing suit through Pressler was unconscionable,” McHugh wrote.

Both cases were dismissed without prejudice.

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