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Courts across the country have been required to deal with the tsunami of cases filed after the 11^th Circuit’s industry changing order in Hunstein v. Preferred. While we all wait for the 11^th Circuit to issue its new opinion, which is expected any day now, a New Jersey state court judge recently issued a stinging rebuke of the Hunstein theory.

In Miller v. Americollect, the plaintiff filed a proposed Hunstein class action in New Jersey state court, claiming that she received a letter from the defendant after wrongly disclosing to a third party printer her status as a debtor and contained information about her medical debt.

Defendant filed a motion to dismiss that raised several arguments, including: a) the plaintiff lacked standing under New Jersey law to bring the claim, as the alleged disclosure concerning the debt caused no injury (the same information was voluntarily published by plaintiff in her bankruptcy case); and b) the transmission of information to the printer was not a communication to a third-party in connection with a debt. 

The court agreed with defendant and dismissed the case, finding that the “transmitting of data to a letter vendor” is not a communication under the FDCPA and was not “undertaken ‘in connection with the collection of any debt.’” The court ruled that the use of a letter vendor is “no different than the telephone/telegram operator engaged as a ‘medium’ for an otherwise permitted communication.”

The judge was also persuaded that a contradictory result would ignore the reality that letter vendors are routinely used for providing necessary information, and that prohibiting the use of a letter vendor would not promote the goals of the FDCPA.

Critically, the court found that the plaintiff’s theory required a “tortured interpretation” that strayed from the FDCPA’s purpose to protect against improper disclosures to employers, neighbors, family members or friends. Letter vendors, and their employees, are unable to cause reputational harm to a consumer by simply having access to debt information. 

Last, the court found that the letter vendor should be considered a communications medium, rather than a person, for conducting debt collection.  

In summary, the court decided: “In these circumstances, to consider such transmission to have been a regulated communication is to apply what the United States Supreme Court has called ‘uncritical literalism’ in interpreting and applying the statute and thereby to torture the meaning of the term as used in the statute, beyond  recognition.” 

As a result, the court found the act of using a letter vendor not to be a third party disclosure prohibited by the FDCPA, and plaintiff’s claims were dismissed. Unfortunately, the case was dismissed without prejudice, thus allowing the plaintiff to file a new complaint. We will follow the next steps in the case.

Although this is a great result for the industry, it is limited to a NJ trial court ruling that has limited precedential value. And, unfortunately, Hunstein claims continue to be brought. 

If you are still struggling on how to get your letters printed, please call us with your concerns. We are here to help!