On Monday April 20, 2020, In a preview of what may become a national trend to push back against state issued prohibitions against collections and repossessions activity, The Association of Credit and Collection Professionals ACA International, filed a lawsuit against the state of Massachusetts Attorney General, Maura Healy, requesting declaratory and injunctive relief from the AG’s emergency measures enacted on March 26 that created a prohibition on outbound debt collection calls and the legal enforcement of debt. The ACA’s lawsuit challenges the constitutional authority of the state AG asserting that the collections ban is a violation of the First Amendment, granting the right to free speech, the Fourteenth Amendment, the right to due process and equal protection under law as well as separation of powers.
In addition to the request for declaratory and injunctive relief, the ACA also filed a contemporaneous emergency motion for a temporary restraining order to halt the enforcement of the AG’s enforcement of 940 CMR 35:00, Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19 (the “Regulation”), issued by the Massachusetts Attorney General (“AG”) and made effective on March 26, 2020.
Read the Restraining Order Here!
The ACA;s attorneys state in their Claims for Injunctive Relief, the following;
- Section 35.04 Is Invalid Because It Violates The First Amendment Of The United States Constitution
- Section 35.03 Is Invalid Because It Violates The First Amendment Of The United States Constitution
- Section 35.03 Is Invalid Because It Is Barred By The Massachusetts Anti-Slapp Law
- Section 35.03 Is Invalid Because It Is Barred By Massachusetts’ Litigation Privilege
- The Regulation Is Invalid Because It Violates The Due Process Clause Of The Fourteenth Amendment Of The United States Constitution
- The Regulation Is Invalid Because It Violates The Equal Protection Clause Of The United States Constitution And Art. 10 Of The Constitution Of The Commonwealth Of Massachusetts
- Section 34.03 Is Invalid Because It Violates State Law Separation Of Powers
- The Regulation Is Invalid Because It Exceeds The Massachusetts Attorney General’S Authority
The ACA member declarations explain that 940 CMR 35.04’s calling prohibitions have required ACA members that have relationships with Massachusetts consumers to largely (if not completely) cease their affirmative efforts to communicate with Massachusetts consumers regarding their financial accounts. As the members explain, this limitation has caused significant economic harm and, indeed, poses a potential existential threat to some of the affected members’ businesses. Additionally, the very basis of the Regulation—that any and every call initiated by a debt collector in the first instance during the COVID-19 public health emergency constitutes an “unfair or deceptive practice”—not only unfairly exposes debt collectors to the risk of suit for engaging in innocent and even helpful conduct to consumers but also inflicts industrywide reputational harm on ACA and its members.
The request for relief, differs mainly in that it is not seeking financial monetary relief based upon damages, but seeks equitable remedy that the court can mandate to compel the state to repeal all or parts of the AG’s emergency measure which directly affect the plaintiff and their represented parties.
In other words, ACA and its members play a vital role in helping consumers resolve financial issues so that they can maintain and restore access to affordable credit and services and be in control of their financial future. When ACA’s members cannot readily reach consumers, creditors may be forced to engage in litigation or garnishment proceedings rather than engage in a conversation with a collector which can help them understand their various options to resolve their legally owed debts.
Massachusetts led the way with this moratorium on collections and was quickly followed by other states and many now have state mandated prohibitions of restrictions on collections, foreclosures and repossession activities. This lawsuit may pave the way for future litigation elsewhere if relief is granted.
