Settle one lawsuit, a new one pops up.  But what if it's the same plaintiff alleging the same violation twice in a row against the same defendant debt collector? 
 
On December 18, in Horia v. Nationwide Credit & Collection, Inc., the 7th Circuit confirmed it's okay for plaintiffs to file separate FDCPA lawsuits based on the failure to mark different tradelines "disputed."  In this case, Nationwide credit reported 2 debts plaintiff owed to 2 different hospitals.  The plaintiff's attorneys sent 2 dispute letters (one for each debt) but neither tradeline was marked disputed. 
 
Plaintiff filed suit alleging Nationwide violated the FDCPA by failing to mark the first hospital's tradeline disputed.  Nationwide settled the case.  Sixteen days after settlement, the plaintiff filed an identical lawsuit for failure to mark the second hospital's tradeline disputed. 
 
Nationwide moved to dismiss, arguing plaintiff was "gaming the system by seeking multiple recoveries for a single kind of wrong."  The N.D. Illinois agreed and dismissed the case. 
 
On appeal, the 7th Circuit disagreed and reversed the dismissal.  The 7th Circuit explained:
 
The two debts are owed...to different creditors. Nationwide Credit sent two debt-collection letters. Horia's lawyer sent back two letters, one disputing each debt. With respect to each debt, Nationwide . . . assertedly failed to tell Experian that the debt had been disputed. The two sequences overlap in time. . . . They involve the same statutory rule and the same debt collector. But the wrongs differ - Nationwide Credit could have given a proper notice for one debt but not the other - and the injury differs. Each failure to notify could have caused an additional harm to credit score or peace of mind...Discrete and independently wrongful acts produce different claims, even if the same wrongdoer commits both offenses and the second wrong is similar to the first. Likewise with discrete violations of § 1692e(8). Each time a debt collector fails to give a credit agency the required notice for a debt is a stand-alone wrong. Disputes that have an independent existence may be litigated separately.
           
Nationwide also argued "allowing sequential litigation is inequitable because . . . [the FDCPA] sets a maximum of $1,000 in statutory damages per case."  The 7th Circuit shrugged this off as a problem for the legislature to solve.
 
The 7th Circuit went on to instruct that "[b]ill collectors can protect themselves" because the FDCPA "provides debt collectors with tools to discourage abusive litigation."  Here are the Court's suggestions:
 
When settling the first case, negotiate a broad release of all claims between the same parties.
  1. In subsequent cases, ask the court to award less than $1,000 statutory damages and little (if any) actual damages. 
  2. Ask the court to order plaintiff to pay your attorneys' fees by convincing the court plaintiff is filing sequential lawsuits to harass.  
With the 7th Circuit on their side, "frequent filers"may be emboldened to split FDCPA claims across multiple lawsuits and will either refuse to negotiate general releases or charge exorbitant sums to do so.  All settlements now require special review to ensure protection.
 
Plaintiff was represented by Community Lawyers Group, a law firm that has been sanctioned by courts for devising "scheme[s] to force settlements from debt collectors by abusing the FDCPA." Tejero v. Portfolio Recovery Assocs. (W.D. Tex. Apr. 2, 2018). In fact, the N.D. Illinois (the court the 7th Circuit overturned here) recently issued another opinion in a case filed by the same law firm against the same defendant (different plaintiff) in which the court stated the firm is "part of a cottage industry of litigants who seek to manufacture lawsuits under the FDCPA in order to secure attorney's fees." Irvin v. Nationwide Credit and Collection (N.D. Ill. Sept. 17, 2019) (quoting Ozmun v. Portfolio Recovery Assocs. (W.D. Tex. Mar. 29, 2019)). 
 
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