In a recent Eighth Circuit Court of Appeals case, a defendant-debt collection attorney raised the Rooker-Feldman doctrine as a bar to plaintiff’s Fair Debt Collection Practices Act (FDCPA) claims. The doctrine prevents federal courts from exercising jurisdiction over lawsuits seeking review of or relief from state court judgments. Here, the debt collection attorney obtained a state court default judgment in Missouri. He then filed it as a foreign judgment in state court in Illinois and sought wage garnishment there. The plaintiff-debtor filed a FDCPA lawsuit in U.S. District Court alleging misrepresentations in various aspects of the debt-collection action. The defendant-debt collector argued that those claims should be barred under the Rooker-Feldman doctrine and also argued they should be barred by statute of limitations.
With respect to Rooker-Feldman, the Eighth Circuit disagreed with the defendant, and found the plaintiff was not seeking relief from the Missouri judgment or the Illinois garnishment proceedings. Rather, he alleged independent FDCPA violations and sought statutory penalties. However, the Court decided plaintiff’s FDCPA claims based on the Missouri default judgment were not viable because equitable tolling was not applicable to the FDCPA statute of limitations. Plaintiff’s claims of a “venue restriction” violation of the FDCPA in the Illinois garnishment action also failed because plaintiff did not meet the statutory requirements for that claim to succeed. In the end, the Court determined that only plaintiff’s claims of possible misrepresentations and excessive charges in the Illinois garnishment action by the defendant debt collection attorney should survive.
After finding that the Rooker-Feldman doctrine did not bar the federal court from exercising its jurisdiction over the case, the Court barred the plaintiff’s FDCPA claims related to the debt collection action and default judgment in Missouri because plaintiff filed his federal complaint beyond the one-year statute of limitations period for FDCPA claims after the entry of the Missouri judgment. The court found that “jurisdictional” limitation periods are not subject to equitable tolling, relying on Mattson v. US West Communications, Inc. (8th Cir. 1992). However, the FDCPA claims related to the Illinois garnishment proceedings were allowed to proceed because the alleged FDCPA violations in the Illinois garnishment action occurred after the entry of the Missouri default judgment but within the one-year FDCPA limitations period.
Next, the Court ruled the Illinois court’s garnishment order did not meet the “venue restriction” provisions of the FDCPA to support plaintiff’s claims that defendant violated those requirements by attempting to collect the debt against him in Illinois. To succeed on that claim, plaintiff was required to show the collection action was brought outside of the judicial district where a signed contract was sued upon or where the consumer resided at the commencement of the action, and that it was an “action against the consumer.” Here, the garnishment action was made against the judgment-debtor’s employer, not the consumer, so plaintiff’s venue restriction claims failed.
In its concluding analysis of plaintiff’s claims, the Eighth Circuit reversed the U.S. District Court’s dismissal of the other FDCPA violations alleged by the plaintiff as a result of the Illinois garnishment proceedings. This allowed plaintiff’s suit to proceed on the claims the debt collection attorney violated the FDCPA by misrepresenting his client’s identity and by seeking excessive amounts of interest and costs related to the underlying debt. The Court found plaintiff alleged sufficient facts to plausibly demonstrate that the collection attorney misrepresented who his client was, and that the amount of garnishment in Illinois exceeded the amount authorized by the Missouri judgment. The court declined to rule further on the viability of plaintiff’s remaining FDCPA claims in Illinois because the parties had not yet briefed the possible state law preclusion issues under Illinois law, and remanded the case for further proceedings.
Weiner Brodsky Kider represents clients in state and federal courts throughout the United States.