New York District Court also sanctions consumer for attempting to intentionally mislead the court and the collection agency, just as the consumer attempted to trick the collection agency into committing an FDCPA violation.
In a ruling issued on May 1, 2015, District Court Judge Cogan in the U.S. District Court for the Eastern District of New York refused to recuse himself from a Fair Debt Collection Practices Act case after a consumer argued that the judge has demonstrated bias based on his harsh admonishment of consumers and consumer attorneys who take advantage of the FDCPA for their own personal gain.
Instead, the judge sanctioned the consumer for failing to disclose new FDCPA allegations against the collection agency. Said allegations were entirely different from the consumer’s previous FDCPA claim fashioned from his obvious, but failed, attempt to entrap the collection agency.
In the case, Huebner v. Midland Credit Management, Inc., No. 14-CV-06046, 2015 WL 1966280 (E.D.N.Y. May 1, 2015), the consumer, who is also a lawyer, brought suit against a collection agency for an alleged violation of the FDCPA during a phone conversation. The consumer alleged that the collection agency told him that “he could not orally dispute the debt” and that “he must have a reason to dispute the debt.”
In support of the consumer’s initial claim, the consumer relied entirely upon the recorded conversation that he initiated with the collection agency. The court analyzed the transcript of the conversation and found that the recording strongly suggested that the consumer had deliberately, but unsuccessfully, sought to entrap the collection agency into an FDCPA violation.
Therefore, the court issued an Order to Show Cause, requiring the consumer to explain why the court should not dismiss the case, award attorney’s fees and costs to the collection agency and issue sanctions against the consumer. In the court’s previously issued Order to Show Cause, the court recounted the recorded call as follows:
"At one point, he asks her, “I don’t understand, I can’t take it off my credit card, my account, without paying it?” The representative declined the bait: “That’s not what I said, sir. I need to know what your dispute is before I can just delete it for you. So you’re saying you want to dispute it. Why is it that you want to dispute it?” Plaintiff then reverted to his refrain that the debt is “nonexistent.” For the third time, the representative asked, “Did you ever have Verizon, sir?” And plaintiff would only answer “I don’t understand the question you ask me, this is a non-existent debt.” She responded, “[I]t is very straightforward question. Did you ever have Verizon service?” Plaintiff again evaded the question: “Okay, but I told you. You asked me, I told you. If you tell me, you’re not going to take my dispute, that’s fine. I’m just going to try to see if I can get more information.” The substantive discussion in the call ended with the representative saying,“I’m trying to help you with your dispute, sir, but you’re not really helping me help you.”
The court went on in its Order to Show Cause to scrutinize and sharply criticize some consumers and their lawyers for litigating FDCPA cases that are mired in technicalities and barely graze the fringes of the original goals and values the FDCPA was designed to serve. And the court said in the Order to Show Cause:
“[This] case… goes beyond anything that the Court has seen. It represents a deliberate and transparent attempt by a sophisticated debtor to entrap a collection company into a technical violation. Even more problematically, plaintiff chose to bring this action even though there is a tape recording showing that the attempt at entrapment utterly failed. The collection company is this case did everything by the book, and yet has still found itself a defendant in an FDCPA action. There are substantial questions about whether this action should be allowed to proceed and whether defendant is entitled to recover attorneys’ fees for having had to defend it.”
In response to the Order to Show Cause, the consumer did not deny that he attempted to hoodwink the collection agency into making an inadvertent technical violation of the FDCPA. Instead the consumer requested the judge recuse himself from the case based upon his alleged bias against consumers and consumer lawyers who purportedly abuse the FDCPA and the judge’s financial interest in the collection agency. The consumer also, for the first time, supplied the court with additional facts in support of his FDCPA claim, which he did not refer to at the Initial Status Conference.
The court quickly denied the consumer’s motion for recusal, finding it frivolous and entirely without merit. The court also sanctioned the consumer $500 for failing to timely disclose his new allegations to support his FDCPA claim that are not recently discovered.
The court explained that the consumer’s failure to come forward with more facts that are seemingly relevant to the case is not good faith cooperation required by the Federal Rules of Civil Procedure.
Instead, the court described the consumer’s actions as an attempt to intentionally mislead the court and the collection agency as to his theory of the case, which behavior is not unlike the consumer’s previous attempt to manufacture an FDCPA violation in the case.
The case is now set to proceed against the collection agency before the same judge based on the consumer’s new FDCPA allegations.