In a stunning 2 – 1 decision by the Ninth Circuit Court of Appeals, a lawyer (or other debt collector) may not send a debt collection letter to a debtor at the latter’s workplace – even if it’s addressed in the debtor’s name, “care of” the employer and marked “personal and confidential” – i.e., no one but the addressee should open it. (Evon v. Law Offices of Sidney Mickell, 2012 DJDAR 10581 (9th Cir. Aug. 1, 2012).)
The majority held that such a letter is a communication with a third party, not the debtor, under 15 U.S.C 1692c(b), because it might – might, mind you – be read by someone other than the debtor. As the dissent said, a letter that might be read by an employer should not give rise to a cause of action.
The majority relied upon a Federal Trade Commission Commentary to justify its opinion – an “in care of” letter may only be sent if the consumer lives at or accepts mail at the third party’s address. (Staff Commentary, 53 Fed. Reg. 50097-02, Dec. 13, 1988).) In other words, the court relies upon the opinion of some unknown bureaucrats who probably have never been in the private sector.
Here’s a question for the majority – what if a third party takes the debtor’s mail out of the debtor’s home mailbox and reads it? Would that be a communication with a “third party?” How would that improper and unauthorized reading be different than the improper and unauthorized reading of a letter in care of an employer, marked personal and confidential? Would the employer and the fellow employees have any liability for improperly reading mail marked “personal and confidential” and in care of the employer? If not, why not?
What if the employment address were the only good one for the debtor, i.e., the debtor changed residences to thwart creditors?
Interestingly, the majority found the contents of the debt collection letter to be acceptable. So, do we have a lawful communication to a debtor improperly opened by third parties, thereby making it unlawful?
And, what about The Doctrine of Unintended Consequences: Has the cost of credit just gone up? Will late fees be increased? Will debtors end up paying higher collection costs as a result of this decision? Does this decision really help consumers?
It potentially helps class action plaintiffs’ lawyers. The majority remanded the case back to the district court for consideration of whether the Federal Rule of Civil Procedure 23(b) factors have been satisfied and for “a proper lodestar calculation of attorney’s fees” – the majority ruled that Rule 23(a) had been satisfied, reversing the trial court for an abuse of discretion. Question: on a split decision, how much of an abuse of discretion is there, really, when at least one appellate judge agrees with the trial judge?
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