Remember last July when Nevada’s new medical collection bill went into effect? Under that new law, S.B. 248, debt collectors are required to send a “60-day notice” to consumers, via registered or certified mail, telling consumers that no collections will take place during this “breather.” 

Prior to the law going into effect, Sessions, Israel & Shartle, LLC and Brownstein Hyatt Farber Schreck, LLP filed a lawsuit and an Emergency Motion for a Temporary Restraining Order asking the court to enjoin enforcement of S.B. 248 on behalf of the ACA, various debt collectors, debt buyers and a debt collection law firm from inside and outside Nevada. 

Plaintiffs argued, among other things, that S.B. 248 was unconstitutional, because it directly conflicted with the FDCPA, FCRA and Nevada state law. Plaintiffs further alleged that any company attempting to collect medical debt in Nevada would be exposed to possible liability under state or federal law if continuing to collect while S.B. 248 is in effect. Since S.B. 248 went into effect on July 1, 2021, plaintiffs’ allegations became reality: most medical debt collectors in Nevada have ceased operations.

On February 7, 2022, after a wait of seven months, Judge Richard F. Boulware, II entered an Order denying the motion seeking the Temporary Restraining Order. The Court reasoned, in shortest summary that:

  • S.B. 248 is not unconstitutionally vague because the purpose of the legislation is to create a 60-day breather and to ensure any voluntary payment made by the debtor does not extinguish that 60-day breathing period or otherwise result in admission of liability;
  • there is no conflict with the FDCPA because a debt collector can comply with both the FDCPA and S.B. 248 simultaneously, as the Court agreed with the FID that the S.B. 248 notice is not a communication subject to the FDCPA;
  • in fact, rather than conflicting with, S.B. 248 actually enhances, the FDCPA protections by providing a consumer with the 60-day breather;
  • S.B. 248 does not interfere with the FCRA, because the FCRA does not have any timing requirements for credit reporting, so no rights to credit report an account are taken away, only delayed; and
  • S.B. 248 does not improperly infringe on any First Amendment free speech rights, because S.B. 248 is only a limited limitation of commercial speech to advance a legitimate state interest.

Though the Court’s decision was obviously not the result anyone wanted, the fight will continue, as the Court’s decision is limited to only the request for the temporary injunction. While we continue to challenge the law, we are here to answer your questions regarding S.B. 248 and will continue to provide updates as the lawsuit progresses.

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