What is a reasonable amount of time for an attorney to review a case prior
to instituting litigation?
That question is the crux of the ongoing case of
Pressler & Pressler LLP. As it currently stands, the case has entered the U.S. Third Circuit Court
of Appeals. After a previous ruling stated that Pressler and Pressler
failed to meet some of the requirements of the Fair Debt Collection Practices Act (FDCPA) by “filing a complaint without meaningful attorney involvement”. In an effort to solidify the original judgement, the
Consumer Financial Protection Bureau (CFPB) teamed up with the
Federal Trade Commission (FTC) to file an amicus brief with their opinions on the actions by Pressler
that they deem to be improper.
What are the facts of the case?
The Plaintiff, Daniel Bock, incurred a credit card debt of $8,021.57 with
HSBC Bank. The debt was subsequently purchased by
Midland Funding LLC, a company that is in the business of buying debts. In an effort to
collect the debt, Midland Funding hired the law firm of Pressler &
Pressler LLP to engage Bock.
Pressler promptly issued a collection letter to Bock. The letter included
a disclosure stating that as of that time, no attorney had reviewed the
account. Bock ignored the letter and did not make any payments to Midland.
In turn, on Midland's behalf, Pressler filed a collection lawsuit
in Supreme court. The complaint was “reviewed, read and signed”
by an attorney, Ralph Gulko.
Bock and Midland came to a settlement agreement of $3000. Prior to settling
the debt Bock requested that Pressler provide evidence of his debt. In
further review of the collection action filed by Gulko, suspicious activity
came to light. In signing the collection complaint with the court Gulko
had declared that the complaint was reviewed and read to the best of his
abilities. After a quick review of the Pressler complaint review process
it became clear that was not possible.
Pressler used a very streamlined automated process in which they first
take in the debt through an automated computer system which scrubs the
data to make sure it is complete and retains any and all essential data
about the debt. The data is then reviewed by trained non-attorney personnel.
After review, the data is sent to a computer system which performs a background
check on the Debtor to determine whether the debtor is still alive, where
they live, and to check if the debt has exceeded its statute of limitations.
A second in-house data scrub is conducted to review all information to
this point. If at this point the complaint still exists, the information
is reviewed for a second time by a non-attorney who will proceed to send
a collection letter to the debtor. Then, Presser will put the debt on
a 30 day wait period. If there is no response after 30 days a team of
non-attorneys will again review the debt if satisfied they will generate
a summons and complaint. Then an electric version of the complaint is
sent to the attorney at Pressler, Ralph Gulko, to be read reviewed and signed.
This all may seem fine at first impression. However, in a given day Gulko
will review anywhere between 300 and 1000 files, which means that, in
a 8 hour work day, at most Gulko is giving each case between 30 and 130
seconds each. It is hard to believe that reasonable review could be conducted
in that time frame. As such Bock brought Presser back to court stating
that they violated the FDCPA for filing a complaint without
meaningful attorney involvement.
According to the computer records Gulko looked at Bock’s case for
a total of 4 seconds. The court stated that their action was not considered a "reasonable
effort" and after further inquiry the courts also found that no member
of Presser’s staff had knowledge of Bock’s original contract
or that any of the Contract’s listed dispute resolution information.
CFPB and FTC Amicus Brief
After receiving the court's original judgement, Presser elected to
file an appeal with the U.S. Third Circuit Court of Appeals. In immediate
response the CFPB and the FTC approached the court as Amici Curiae (friend
of the court).
An amicus curiae is an unaffected third party who while not a party to
the case brings forth information relevant to case without being solicited
by either of the parties in the lawsuit, acting only to offer assistance
to the court. After petitioning the court as amici curiae, the CFPB and
FTC were granted permission to file an amicus brief to give their professional
opinion on the case facts.
According to multiple online sources their joint amicus brief the CFPB
and FTC declared “Under any conceivable standard, four seconds is
not enough to become meaningfully involved and form a professional judgment
about the appropriate action to take. For that reason, Pressler’s
representation that an attorney had done so was deceptive and violated
the FDCPA.” This stance reaffirms the original courts decision.
Additionally the brief drafts out their interpretation of what they consider
to be meaningful attorney interaction under the FDCPA.
While it is too soon to tell, it would appear that the case of
Bock v. Pressler and Pressler, LLP may soon become somewhat of a landmark case with regards to the subject
matter of “meaningful attorney involvement”. We are currently
at a time where legal procedure is becoming more streamlined due to advances
in technology, and clarification is needed from the courts.
Generally, courts are supportive of newer and faster pace legal processes,
and try not to stifle attorneys to the ways of old. However, as these
new methods surface, the courts have to insure that the new methods continue
to adhere to a certain standard to ensure that no parties are prejudiced
by the new processes. This case may be the first in a long line of “meaningful
attorney involvement" cases that may continue to arise in the years to come.
NOTICE: THE LAW OFFICE OF SIMON GOLDENBERG PLLC IS NOT INVOLVED IN THE
ABOVE NOTED MATTER IN ANY RESPECT. WE DO NOT REPRESENT ANY OF THE PARTIES.
WE ARE MERELY DISCUSSING THE CASE AS IT RELATES TO CONSUMER LAW.