U.S. Supreme Court Refuses To Hear Law Firm's Appeal Regarding Debt Collection

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Jan. 23 declined to hear a case in which the Third Circuit U.S. Court of Appeals had determined that a law firm's communication with a Chapter 13 debtor pertaining to the foreclosure of her home was a violation of federal debt collection law (Fein, Such, Kahn & Shepard v. Dorothy Rhue Allen, No. 10-1417, Chapter 13, U.S. Sup.).

 

In 1976, Dorothy Rhue Allen purchased a home.  Thirty years later, when she was unable to make her final mortgage payment, her lender attempted to foreclose on her house.  The law firm Fein, Such, Kahn and Shepard (FSKS) agreed to prosecute the foreclosure action and in May 2007 sued Allen in a New Jersey superior court. 

The court awarded FSKS the amount of the loan balance on the mortgage, as well as attorney fees and costs totaling $5,797.45.  Allen appealed to the U.S. District Court for the District of New Jersey, arguing that the fees and costs were impermissible. 

The District Court affirmed the state court's ruling, and Allen appealed to the Third Circuit, which reversed.  FSKS then appealed to the U.S. Supreme Court. 

In its petition for writ of certiorari, FSKS contended that the Third Circuit's interpretation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S. Code Section 1692, was incorrect because the act exempts lawyer communications in their entirety. 

Allen countered that such a reading of the FDCPA is incompatible with provisions in the FDCPA that specifically address communication by debt collectors and attorneys. 

Allen is represented by Brian R. Frazelle and Adina H. Rosenbaum of Public Citizen Litigation Group in Washington and Lewis G. Adler of Woodbury, N.J.  FSKS is represented by Karen Painter Randall, Andrew Christopher Sayles, Thomas S. Cosma, Thomas J. O'Leary and M. Trevor Lyons of Connell Foley in Roseland, N.J. 

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