The Hunstein opinion will remain precedential and binding in the 11th Circuit but will not become final in other circuits at this time.
On Monday the 14th, the 11th Circuit Court of Appeals has issued an order withholding the issuance of a mandate to the Hunstein v. Preferred Collection & Mgmt. Servs. Inc. panel decision from April 2021.
By withholding the mandated issuance order, the Hunstein decision is not final in all circuits at this time. This order appears to have been made in response to the defendants petition for en banc rehearing and the numerous amicus briefs filed by associations from around the nation supporting the en banc petition filed with the court in May and early June.
Regardless of the relief at least temporarily granted to the other circuit courts, the Hunstein panel opinion still remains precedent and binding in the 11th Circuit.
In the event that the petition for an en banc rehearing is denied, the ACA, with the support of the Industry Advancement Fund(IAF), are prepared to provide support for a petition for writ of certiorari to the U.S. Supreme Court.
On April 21, 2021, the U.S. Court of Appeals for the Eleventh Circuit issued a decision on Hunstein v. Preferred Collection and Management Services, Inc., which on first impression, finds that a debt collector’s transmittal of a consumer’s personal information to its letter vendor constituted a prohibited third-party communication “in connection with the collection of any debt” within the meaning of section 1692c(b) of the Fair Debt Collection Practices Act (“FDCPA”). This ruling has broad ramifications for the collections and accounts receivable management industries and opened the door for over one-hundred lawsuits in it’s wake.
On May 25th, Preferred Collection and Management Services, Inc., defendant in the tumultuous decision in the matter of Hunstein v. Preferred Collection & Mgmt. Services., Inc., filed its petition for a rehearing en banc. Preferred is asking that the 11th Circuit grant a “panel rehearing or, rehearing en banc, of the panel’s decision rendered on April 21st. At stake is a continuous avalanche of class action lawsuits from coast to coast.
Richard J. Perr, ACA International Board Member and attorney for Preferred Collection and Management Services, Inc., wrote in the opening statement of counsel; “the panel’s decision is contrary to the following decisions of the Supreme Court of the United States and the precedents of this circuit and that consideration by the full court is necessary to secure and maintain uniformity of decisions in this court”.
Perr, along with co-managing partner of Kaufman Dolowich & Voluck, LLP, and Robert Vigh of Solomon, Vigh & Springer are arguing that the court’s initial April opinion departed from U.S. Supreme Court and 11th Circuit precedent on the issue of Article III standing and specifically on whether an alleged statutory violation of 15 U.S.C. Section 1692c(b) constitutes a “concrete injury.”
The petition goes on to argue that the panel’s analogy to the common-law tort of “public disclosure of private facts” failed to make a “close connection” between the harms that Congress sought to prevent with the enactment of 1692c(b), the harms that the plaintiff alleged (or didn’t allege), and harms that have traditionally been regarded as a primary basis for lawsuits in American courts.
The defendants petition alleges that “[t]he panel did not examine whether Plaintiff’s specific allegations were the type that bore any relationship to a harm protected at common law. If it had, as mandated by [existing Supreme Court and Eleventh Circuit precedent], the panel could not possibly have determined that the alleged violative conduct was the type that is ‘traditionally’ protected [under common law].”
In addition to the previous arguments, the petition also makes note that the Colorado Supreme Court has previously maintained that the use of letter vendors by collection agencies poses no harm to consumers, citing Flood v. Mercantile Adjustment Bureau.
The petition goes as far as using the Consumer Financial Protection Bureau’s (CFPB) amendments to Regulation F, and other CFPB resources and actions, demonstrate that a debt collector’s use of a letter vendor is not a per se violation of the FDCPA’s prohibition on third-party disclosures.
