Nathan A Adams IV is a Partner in Holland & Knight's Tallahassee office
In Echlin v. PeaceHealth, 887 F. 3d 967 (9th Cir. 2018), the Ninth Circuit affirmed summary judgment of a putative class action lawsuit filed under the Fair Debt Collection Practices Act (FDCPA) for alleged violation of its "flat rating" prohibition. PeaceHealth Southwest Medical Center referred delinquent patient accounts to Computer Credit Inc. (CCI). For a fixed fee, CCI (1) independently screened accounts for barriers to collection; (2) drafted and mailed the collection letters that invited debtors to contact CCI; (3) received roughly 500 calls a week from debtors; (4) provided a variety of information about debts and how to repay them; (5) maintained a website where debtors could access individualized information about their debts and submit documents to CCI; and (6) sometimes received and forwarded payments it received from debtors. CCI would mail up to two collection letters for each delinquent account, then refer the debt back to PeaceHealth for additional action if not collected. CCI did not have authority to negotiate or process payments from debtors. The debtor plaintiff sued on the theory that CCI's letters "created a false or misleading belief that defendant CCI was meaningfully involved in the collection of [her] debt prior to the debt actually being sent to collections" in violation of 15 U.S.C. s. 1692j (which prohibits flat-rating). The plaintiff argued that CCI must do more than mail form letters to "participate" sufficiently in debt-collection efforts. The district court and Ninth Circuit disagreed that more was necessary than CCI undertook. According to the Ninth Circuit, "The key is whether, in consideration of all that an entity does in the collection process, it genuinely contributes to an effort to collect another's debt, or instead does little more than act as a mailing service for the creditor."
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