Debt Collector that you sue can take ownership of your lawsuit to get it dismissed

We've officially entered an dystopian alternate reality in US law. Debt collectors that use unfair practices, if sued, can now just sell off all of your property including your lawsuit against them. Then a federal judge will let them off the hook for unfair practices, since it would be weird for a company to sue itself.

Suing a Debt Collector? Now They Can Buy Your Lawsuit

Can a debt collector accused of crossing the line avoid liability by buying a consumer’s legal claim out from under her?

A federal judge in Las Vegas said yes.

In March 2015, Patricia Arellano of Las Vegas received a notice from Clark County Collection Service (CCCS), a private debt collector seeking $370 in overdue medical bills. Arellano didn’t respond. CCCS went to court and obtained a default judgment against her. The bill grew to about $800, with costs and fees.

Next, Arellano sued CCCS under the federal Fair Debt Collection Practices Act.

Seeking to enforce its judgment, CCCS obtained a “writ of execution” under which the sheriff of Clark County was obliged to sell off Arellano’s property. But not just her physical property—the writ also covered her pending legal claim against CCCS. In an auction held last November on the steps of the Clark County courthouse, Arellano’s claim against CCCS under the Fair Debt Collection Practices Act was sold for $250. The buyer? None other than CCCS. A few months later, CCCS asked a federal judge to dismiss the fair-debt collection claim on the theory that CCCS didn’t want to sue itself. Arellano opposed the motion.

U.S. District Judge Jennifer Dorsey ... ruled for CCCS, effectively killing Arellano’s lawsuit. The hearing took 11 minutes.

Washington-based Deepak Gupta argues that the series of events tolerated in this case undermine the purpose of the federal fair-debt collection law.

“The FDCPA is meant to accomplish its goals through a nationwide scheme of private enforcement; victims of debt-collection abuses may bring suit, and win statutory damages, to deter future violations,” Gupta argued in his brief. “But if CCCS gets its way, that system would crumble.”

[emphasis mine]

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Replies to This Discussion

Kafka come to life!

Indeed, this is probably the ultimate defense against any kind of complaint against a company: buy the lawsuit (just how do you BUY a lawsuit?!?), then dismiss it.  Any company or corporation with sufficient funds could make their complaints just go away, perhaps up to and even including class actions against them.

Frankly I don't see this as POE at all, but as just plain dangerous.




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