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FDCPA does not cover court communications

“My creditor tried to mislead the judge” is not grounds for a debtor to sue the creditor under the Fair Debt Collection Practices Act.

Judge Daniel Manion wrote for the 7th Circuit on March 17, “Because nothing in the Act’s text extends its protections to anyone but consumers and those who have a special relationship with the consumer, we hold that the [FDCPA] does not extend to communications that would confuse or mislead a state court judge.”

Michael O’Rourke owed several thousand dollars on a Citibank credit card. The debt was sold several times until it wound up with Palisades Acquisition XVI LLC.

Unable to collect, Palisades filed suit in Illinois state court, and attached to the complaint a statement that appeared to be a credit card statement, but which was not authentic.

Palisades’ business model only contemplates obtaining default judgment against debtors, but not actually trying cases. When O’Rourke appeared for trial, Palisades dismissed the case.

O’Rourke then sued Palisades in federal court under the FDCPA, alleging the fake credit card statement was intended to mislead the judge into granting a default judgment.

The district court dismissed the case, and the 7th Circuit affirmed.

The court acknowledged it is an open question in the circuit whether the FDCPA can apply to legal pleadings. Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470 (7th Cir. 2007).

But since the only question raised on the appeal was whether a statement intended to deceive a judge is actionable, the court limited itself to that issue, and held it was not.

The court noted that it recently held that the FDCPA does not apply to a communication with the debtor’s attorney. Tinsley v. Integrity Financial Partners, Inc., No. 10-2045 (7th Cir. Feb. 11, 2011).

Looking at the language of sec. 1692e, the court acknowledged that, on its face, the statute has no limits regarding to whom the misrepresentation is made: “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”

But the court concluded, “There must be a limiting principle” to the scope of the statute.

The court then set forth as a limiting principle that the FDCPA’s protections do not extend beyond the consumer and those who stand in the consumer’s shoes.

The court explained, “This gives consumers the full breadth of protection that the Act permits and keeps us from reading into the Act whatever implausible ends O’Rourke’s lawyers can conjure up.”

Judge John D. Tinder wrote a concurring opinion.

Quoting the same statutory language set forth above in sec. 1692e, Tinder opined, “In my view, the use of the judicial process is unquestionably a means by which debts are collected, and I struggle to find in the language of the statute any reason why statements or representations made during the use of the judicial process should be categorically excluded from its ambit.”

What the Court Held

Case: O’Rourke v. Palisades Acquisition XVI, LLC, No. 10-1376

Issue: Are communications to a judge actionable under the FDCPA?

Holding: No. Only communications to the debtor are actionable.

David Ziemer can be reached at

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